Acquiring real estate is a lot like dating, and then getting married. You get the opportunity to check the place out and see if you like it, then you seal the deal. But, just like getting married, many investors tend to find out about some skeletons in the closet that can turn out to make your life difficult.
We’ve all heard stories about some of these ghosts and goblins hiding in the most unsuspecting places. For instance, one investor acquaintance of mine picked up a lot that was prime for development in the perfect location of a town, but the only problem was there was an old fuel tank buried underground on the back of the property. The cost to evaluate the environmental impact, and then remove the tank made the investment look pretty terrible, actually.
Mistakes to Avoid When Inking Commercial Real Estate Deals
In this blog, we’ll look at five of the most common mistakes made when making a real estate deal:
Environmental Clause – Inexperienced real estate developers tend to care only about the asking price and location of a parcel, and sometimes unfortunately leave environmental impact considerations off the table. If you don’t include an environmental impact clause in the contract, then you’ll have to settle for any unforeseen pitfalls. By not negotiating environmental terms and conditions, you might be waiving your right to any unforeseen consequences. By establishing environmental terms and conditions, you may be able to avoid any responsibility or liability for any unforeseen dangers hidden in a structure or buried beneath the ground. The seller and the buyer should both take an active role in getting an environmental assessment on the property done, and assign known and unknown environmental liabilities. Taking a proactive approach to environmental terms and conditions, will help the buyer from taking over another party’s miserable debacle.
No Environmental Assessment – Not getting a Phase I Environmental Site Assessment would obviously be another rookie mistake. A properly conducted Phase I ESA will help uncover any land uses of the property from the very beginning of recorded history to present. The Phase I ESA will also unveil any past environmental disasters or investigations on the property.
Failing to Retain a Reputable Environmental Consultant – Hiring a competent and professional environmental consultant is imperative in terms of doing environmental quality due diligence. Be sure you check out the reviews and qualifications of the consultant. Spending the right amount of money up front will ensure that you don’t have any unforeseen environmental liabilities later on. You can always hire a cheap consultant, but you get what you pay for.
Short-Changing Yourself on Due Diligence – If you rush the environmental due diligence portion of the buying process, then you might miss something in the process and make some hastily made decisions that will come back to bite you in the end. This will include everything from hiring a qualified consultant, conducting a Phase I ESA, pulling permits, getting city and/or county building approval, assessing any environmental liability, and a Phase II EAS for high-risk land use. On average, due diligence will take anywhere from 60 to 90 days. If the seller demands a quicker due diligence period, then that should raise a red flag and you might have to walk away, because the consequences may be more expensive than you imagined.
Poorly Arranged Framework for Post-Closing Obligations – The post-closing obligations should be handled properly before the closing date. Oversimplifying responsibilities and guarantees can very easily lead to unexpected fees, costs, and delays. Special attention should be paid to access, fees and costs, confidentiality, scheduling clean up, filing Record of Site Condition, indemnities, releases, and contingencies.
Real estate transactions and property disputes involve risks, which is why you need Denver Business Attorney Thomas E. Downey, who is trusted, knowledgeable, and experienced. Since 1983, Thomas Downey and the legal team at Downey & Associates, PC, have been providing attentive and knowledgeable legal counsel on how to handle your real estate matters.
Working with our team, located in Englewood, you’ll save money, time, and worry. Our aggressive professional advocacy team handles the following types of services: business and commercial disputes, antitrust litigation, real estate matters, personal injury (both plaintiff and defense), product liability, property tax, employment law, and OSHA/MSHA conflicts.
To schedule a free, no-obligation consultation, call (303) 813-1111 or by emailing us using the contact form on this page.
Have you ever wondered how safe your current (or a prospective) workplace really is? Well, the U.S. Occupational Safety and Health Administration (OSHA) has recently enacted a new compliance measure, requiring roughly 750,000 employers (which operate about 1.5 million workplaces) to submit detailed annual reports regarding work-related injuries and illnesses online as of 2017. This new rule is reportedly set to take effect this month.
The New OSHA Rule: A Look at the Details & Requirements
According to the new OSHA reporting rule, businesses that have more than 250 employees and/or at least 20 employees in high-risk positions are required to file these online reports every year.
The new rule also includes provisions stipulating that:
Employers that try to retaliate against “whistleblowers” or employees who report employers' violations of OSHA requirements will be subject to penalties.
Reporting safety data to OSHA will only have to occur on an annual basis (rather than a quarterly basis).
Prior to making any employer report available online, all sensitive and personal information will be stripped or blacked out of these reports.
States that have their own occupational safety and health laws must incorporate “substantially identical” requirements for online injury and illness reporting. These measures must be adopted within six months.
Pros and Cons of Reporting Workplace Injuries and Illnesses
OSHA officials are hopeful that this new reporting rule will improve workplace safety across the U.S. - and enhance employers' compliance with OSHA regulations (due to the increased transparency).
There are, however, various critics of this rule. These critics contend that:
The new rule for publishing workplace injuries and illnesses online would lead to public shaming of employers and blame for injuries, illnesses or accidents that are sometimes out their control.
Data on injuries and illnesses is already being tracked by companies and shared with OSHA during regular inspections or surveys.
The new rule could bring new (and more) enforcement actions against employers, which could, in turn, impact company wellness incentive programs and drug-testing policies for injured workers.
Opposing these critics, labor unions and organizations generally embrace the new rule. As Christine Owens, executive director at the National Employment Law Project, has explained:
More than 4,800 workers were killed on the job in 2014; almost 3 million more suffered serious injuries... This is an unconscionable toll of workplace disease and death for a 21st-century economy, and OSHA must do all it can to improve the safety and health of America’s workers.
For experienced, effective representation in an employment law or other business dispute, contact Denver Business Attorney Thomas E. Downey. Since 1983, Thomas Downey and the other legal professionals at Downey & Associates, PC have been providing exceptional representation for various business legal issues, including those related to OSHA compliance issues, contract negotiations, and corporate governance issues.
Our dedication to our clients, coupled with our extensive experience handling complex matters of corporate and real estate law, means that our clients can always trust that we will aggressively protect their rights and help them achieve the best possible outcomes to their sensitive legal matters.
Call our Denver business attorney today at (303) 813-1111, or email our firm using the contact form on this page.
From law offices based in Centennial, we serve clients throughout Colorado and the U.S.
Downey & Associates PC represents clients in Denver and in the surrounding Colorado communities including Englewood, Littleton, Aurora, Greenwood Village, Broomfield, Boulder, Westminster, Fort Collins, Colorado Springs, Adams County, Denver County, Arapahoe County, Douglas County, Jefferson County, Boulder County, Larimer County and El Paso County.
