Real estate transactions

Holding Title

Title to real estate can be held in the name of an individual, a trustee, a limited liability company, a corporation, or other legal entity. If title is held by an entity, the entity can be organized or incorporated in Arizona or in any other state. Generally, Arizona does not require registering a foreign entity if the sole purpose of the entity is to hold title to real estate. In determining how best to hold title we will review your estate plan, your financial objectives, and the purpose for which your property will be used.

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1031 Exchange Investment Property

The federal tax code provides special tax treatment for sales of investment property where substitute property is procured within a certain timeframe before or after the sale. This is called a "like kind exchange" or a "1031 exchange". The rules for these exchanges can be complex, and a separate qualified intermediary needs to be involved in the transaction. If the Firm is advising with regard to the transaction, we cannot also be the intermediary. If you are selling investment property or purchasing investment property under a 1031 exchange, legal advice will help you understand the exchange process, advise you on tax implications of different options, and review your transaction documents to reduce the risk of not qualifying for special tax treatment.

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Performance Issues

Not all transactions are perfect. Sometimes during a transaction, issues arise from either the buyer or seller that may affect the outcome of the transaction. If you are affected by such an issue, whether it originated with you or with the other party in the transaction, timely legal advice can help avoid costly litigation. Generally, if a dispute reaches the courtroom, it will cost thousands of dollars to litigate, even if the parties end up eventually reaching a settlement. As such, it is generally a good idea to address issues early with legal counsel who is not affected by the prospect of gaining or losing a commission from the sale of the property.

Foreclosure Property

Property purchased directly at foreclosure auctions can bring with it a number of legal risks. The property may have existing owners who may resist the sale, sometimes for justified reasons. The property may also have tenants who may have been given no notice regarding the sale. The property may also have mechanic's liens or other encumbrances that need to be addressed. Before purchasing property at foreclosure auctions generally, it is advisable to consult with legal counsel and develop a risk-mitigation plan.

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Commercial Transactions

The term "commercial transaction" as used here refers to a transaction involving commercial or industrial real estate (e.g., office space, warehouse, factory, etc.) as well as transactions involving real estate zoned as residential but used for business or profit-generation purposes (e.g., apartment buildings, assisted living facilities, foster care facilities, etc.). The due diligence in commercial transactions is substantially more complex for both sellers and buyers. On the one hand, buyers need sensitive information about the business or tenants at the property to determine whether the transaction is worthwhile. On the other hand, sellers want to avoid disseminating information to potential competitors or other parties who do not have a good-faith intent to purchase their particular property and business. Letters of intent, confidentiality agreements, indemnification agreements, and similar instruments are typically involved in commercial transactions. Obtaining timely legal representation will help protect your rights, whether you're a buyer or seller.

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Land

In Arizona, the purchase of raw land has been part of the ethos of the state from its beginnings. There is something magical about having a large expanse of terrain to call your own and to develop. Despite its perceived simplicity, land purchases have risks apart from other types of real estate transactions. The concept of adverse possession, where the possessor or user of land can claim title notwithstanding the titleholder of the property, is a real concern. And for any land parcels purchased with a view to development, issues such as zoning, subdividing, easements, and compliance with local and county ordinances can present complex legal challenges. If not assessed prior to purchase, these challenges may turn into an expensive problem down the line.