Northwest Real Estate Law Blog : Northwest Real Estate Lawyer & Attorney : Davis Wright Tremaine Law Firm : Land Use, Development, Commercial Property : Seattle, Portland, Alaska, Washington, Oregon

Authored by: Stephen Ledoux

As published in the Daily Journal of Commerce

China’s spectacular economic rise since being opened by Deng Xiaoping has largely been the result of indigenous industrial growth, alone or with foreign joint venture partners. It has become the world’s top manufacturer and exporter of goods, and amassed an enormous trade balance, with the United States in particular.

Since Beijing announced its “Going Global” initiative a decade ago, along with the pressure of China’s accumulating liquidity (cash) in state-owned and private enterprises, the country is looking abroad. Now, outbound direct investment (ODI) is the latest major economic trend in the world’s most populous nation.

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Authored by: Tom Hillier

As published in the Daily Journal of Commerce

In many commercial transactions involving the lease or sale of real property, the first document drafted by the parties to evidence the agreement terms is a letter of intent. Generally speaking, the letter of intent is simply an expression of the parties’ intent to proceed with formal documentation of the transaction and is not intended to be binding. So, why use an LOI?

Commercial real estate transactions are usually complex matters with many terms to negotiate. Parties use the LOI for two basic purposes.

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Authored by:  Gene Grant and Monique Hawthorne

In such times, seller financing can be used to obtain a premium purchase price. Not only are the underwriting process and financing fees and costs avoided, but the seller often will finance a much higher percentage of the purchase price than would a typical mortgage lender. If and when interest rates increase, sellers can benefit by providing seller financing at a lower rate.

Seller financing has become something of a lost art. Following is a brief review of major issues that should be resolved carefully and that typically require the assistance of a real estate attorney.

 

 

As published in The Daily Journal of Commerce

Real estate prices today are historically low because there are far fewer buyers than sellers. Foreclosures continue to flood the market with bargains. But people seeking to buy real estate during a severe recession often are unable to qualify for financing even though interest rates are enticingly low.

 

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Authored by:  Alan Middleton

The buyer of a residence has an absolute right to rescind prior to closing if the seller fails to provide the disclosure statement mandated by RCW 64.06.020. That is the holding in Almanza v. Bowen, a recent Division I case. There, a buyer rescinded because the buyer's prior home had not sold. It was undisputed that the seller had not provided a disclosure statement. The Court rejected the seller's argument that the buyer could not rescind because the rescission had nothing to do with the condition of the residence and the failure to provide the disclosure statement. Although the statute does permit a buyer to waive the right to a disclosure statement, the Court held on the facts presented that no waiver occurred. The case can be found here.

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We recently met with some surveyors, who passed on the following tips for keeping costs down on land surveys:

 

• In order for them to provide a realistic price quote, they need to see copies of the property title report, the prior survey (if you have it), and the lender's survey requirements (including the form of surveyor's certificate required by the lender).

• Attached is a PDF of the 2005 minimum standards for an ALTA/ACSM survey.  The "Table A items" on pages 4 and 5 are the additional items that a surveyor can show on a survey.  Ask your surveyor to look at the list of Table A items required by your lender.  The following Table A items can significantly increase the cost of the survey:

• Item #1:  Placing a monument (e.g., a marker or a pin) at every major corner on the property.  The surveyor must also file a record of survey with the County Recorder’s office at an additional cost of approximately $2000.

• Item 5:  Showing the contours and the elevations of the property.  This is usually required only if development or construction on the land is involved.

• Item 7(b)(2):  Calculating the gross floor area of all buildings on the property.  

• Item 11(b):  Mapping the location of underground utilities.  See if your lender will accept Item 11(a) instead, in which the surveyor shows the location of utilities based on observed evidence on the surface.

• Make sure the list of items your lender says it wants the surveyor to cover is consistent with the lender’s form of surveyor’s certificate.  The lender’s form of surveyor’s certificate often contains additional requirements, so the cost to you will increase if the surveyor has to go back and do additional work.

• For projects with lots of acreage, one way to cut down on costs can be to have an aerial photogrammetry map done showing the location of interior buildings.  Traditional survey methods would then be used to establish the boundaries of the property and any features within 5 feet of the boundaries.  You should talk to your lender about whether this method is acceptable in lieu of a traditional ALTA/ACSM survey.

One other tip: surveyor contracts often contain a provision limiting their liability for any errors to the cost of the survey, which doesn’t provide much protection to you.  It’s worth asking the surveyor to delete that limitation before you sign the contract.

 

ALTA 2005 Standards (pdf)

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In the challenging real estate market that the entire country is facing, many developers and real estate purchasers are looking for less conventional ways to finance their projects. Please see the link below to an article that describes several ways to finance projects with what I call "Real Estate Securities."

www.dwtrealestatelawnw.com/Portland Bus Journal 8-31-07.pdf

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If you are interested in learning creative ways to structure your transactions through the use of entities, you should read the article below:

www.dwtrealestatelawnw.com/Rathbone Article in PSBJ.pdf

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Have you ever had the experience, when working on a real estate transaction, that you come to the brink of closing but end up with a failed transaction as a result of something that happened along the way? See the attached article, which outlines some of the events that commonly result in failed closings. Using this outline can help you achieve your end result -- a closed transaction.

www.dwtrealestatelawnw.com/DJC Rathbone 12 Obstacles.pdf

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