There is the potential for real estate development to bring a lucrative income, but the risks associated with the industry could cost you everything. While you are busy working to keep your project on track, you could overlook crucial steps or information and undermine your business plans.
While you should expect some business risks, you can proactively lower your legal risks with a few key steps.
1. Develop an experienced team
Regardless of your experience level, bringing in outside advisors and professionals can help you identify and address risks across the entire development process. Consider adding an architect, real estate consultant, financial advisor or environmental consultant to your advising team. Their insight will help reduce your legal exposure in these areas.
2. Work with tailored contracts
Your development project will utilize several different vendors, contractors and parties. Rather than using one generic document for each agreement, craft a specific contract for each situation. These can include construction contracts, consultant agreements and lender or vendor contracts. By customizing your sales or purchase contracts, you can use language that protects your interests and minimizes legal issues.
3. Familiarize yourself with the law
You cannot protect yourself from legal concerns if you do not understand how local, state and federal laws apply to your project. Whether it is zoning regulations or environmental compliance, familiarize yourself with applicable laws and partner with a legal representative to handle those concerns for you.
Proactively addressing areas of concern can prevent expensive litigation. You have more resources to put into your development project and other investments.