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Real Estate Bulletin
Spring 2007
Due Diligence in Real Estate Transactions by Glenn A. Fuller Esq.
Overview (“Environmental Issues”). These two the process. The availability of resources,
“legal” due diligence categories will not the number of professional consultants,
I. Why Due Diligence? be discussed in this article since they are and the allocation of due diligence
each broad and important enough to responsibility will, of course, vary with
One of the oldest common law maxims merit their own separate analysis. Also each transaction and the needs of the
regarding real estate is that no two for the purpose of this article, I use the individual investors. In almost every
pieces of real estate are the same. In term “investor” to represent the party case, however, the process will involve a
a highly complex and an increasingly conducting the due diligence since I team approach. As such, the first task of
sophisticated real estate market, this believe the need for thorough due the real estate investor and its attorney
has never been more true. For instance, diligence exists in virtually every major is to identify the team of consultants and
take two buildings of the same size, transaction, including the acquisition of their respective roles.
class and quality; chances are, there will property for investment or development,
be significant differences in valuation extension of a loan secured by real While the attorney ’s substantive
between these assets based simply on estate, formation of investment in a contributions will in almost all cases
variables such as the location of the real estate syndication or entry into a require expertise in traditional real
property itself, the legality and flexibility long-term ground lease. While the estate law including landlord/tenant
of its existing and potential uses, traffic needs of each of these “investors” in law, conveyance and title issues, entity
patterns, lot configuration and a host of each individual transaction will vary, formation issues, and the principles of
other factors. In addition to empirical the core principles involved are the real estate financing, depending on the
differences, the provisions of the leases, same, including the absolute necessity project in question and the history of its
matters on title and the location of the of extensive due diligence. Finally, the use, sometimes specialized knowledge
improvements on the property in relation issues involved in conducting the due of land use and hazardous waste
to recorded restrictions can result in diligence will vary depending upon asset materials regulations, development
dramatic economic differences in the class and the status of entitlements and and construction principles and other
value of seemingly similar real estate improvements on the asset. This article related disciplines are necessary for even
assets. The only way these factors can will focus primarily on the common fully improved projects. Increasingly
be ascertained and incorporated into issues an investor and its legal counsel real estate transactions involve tax and
the decision making process is through should consider in connection with the business law issues including issues
thoughtful, exhaustive investigation – in acquisition of a fully improved office related to 1031 tax exchanges, tax and
other words, through due diligence. building, shopping center or industrial other implications of contributions of
complex. real property to entities, being cognizant
For purposes of this article for conceptual of the investor’s exit strategy to help
reasons, I have divided the due diligence II. Allocation of Responsibility structure and acquisition a loan to militate
process between “factual” due diligence against adverse tax consequences in the
and “legal” due diligence. Sometimes, The due diligence process for real estate ownership and dissolution of the asset.
depending upon the circumstances, investments involves many professional Finally, if the investment in question
traditional “legal” due diligence must disciplines, including law, architecture, involves a syndication, the attorney
be supplemented by two additional planning, engineering, appraisal, market involved in the transaction should be able
areas of concern: compliance with and the financial analysis. In general, in to advise the investor regarding securities
land use and zoning regulations order to conduct adequate due diligence and other issues in connection with
(“Land Use”) and if toxic or hazardous within the time frames generally provided raising funds from investors. This can
materials or other contaminants are by the contract provisions it is necessary include advising clients on the special
involved, environmental legal review to assemble a qualified team to conduct requirements and restrictions applicable
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to investments made by pension funds, real the investor will focus initially on review of inadequate or raises significant questions;
estate investment trusts and other entities. the preliminary title report and supporting
documentation, leases and survey. As There needs to be sufficient time to allow
In general, it is the responsibility of noted above, consultants will generally the investor and its counsel the maximum
environmental inspectors, soil engineers focus on the third-party reports along with opportunity to evaluate the information
and other consultants to identify potential the investor to determine the appropriate assembled; and
environmental problems and it will be the physical condition of the property, relevant
responsibility of architects, civil engineers, market conditions (through appraisals, The discovery and evaluation of a problem
building inspectors and other consultants market studies and financial analysis), must be identified far enough in advance
to insure compliance with zoning laws compliance with governmental agencies’ of the scheduled closing date to enable
and building codes; provided, however, requirements and, if necessary, compliance the parties to (i) solve the problem before
that analysis of compliance for zoning, with environmental laws. closing, (ii) postpone closing to solve or
subdivision and other land use regulations eliminate the problem or to modify the
generally involves legal review as well. For Because of the complexity and infinite relevant agreements by price adjustment or
example, in the case of acquiring or financing variations in the due diligence process, it is otherwise, or (iii) negotiate and document
a project under construction or recently built, impossible to set forth a single methodology a post-closing remedy.
a thorough review by a land use attorney or set of procedures that will apply to
of the project approval proceedings and each and every transaction; however, Use of Checklists. A good due diligence
other operative documentation is needed to certain important principles apply to all checklist is an important analytical tool
confirm the absence of procedural defects, due diligence investigations. In general, for systematically reviewing issues and
expiration of applicable statutes of limitation these will involve the establishment of two recording the information discovered. A
for legal challenges, or other vesting rights extremely important issues: (i) timing; and checklist may simply be a lengthy list of
in project approvals. (ii) the use of checklists. all items that are potentially relevant to a
particular transaction with an indication of
Whatever the allocation of responsibility, Timing. In almost all real property who is responsible for a given issue and
the attorney/client relationship should transactional documents, the approval a space provided for indicating whether
provide that someone, either a professional of due diligence is a condition for the a review or investigation is required. A
consultant or an expert within the client’s investor going through with the transaction. more elaborate version is a matrix of items
organization, coordinates closely with Consequently, time periods for approval are that not only identifies the issues and the
counsel to ensure that each aspect of due usually hotly negotiated issues, with sellers party responsible for each aspect of due
diligence investigation is adhered to. and lenders seeking the shortest possible diligence, but also allows for an updated
period for investigation and buyers and narrative statement about what has been
III. The Due Diligence Process borrowers seeking the longest possible done and how an issue has been resolved.
period of time to insure adequate due This approach is almost always used in
Most acquisitions and loan documentation diligence review. It is almost always the complex real estate transactions and is an
provide for extensive pre-closing conditions case, however, that due diligence must be effective way to immediately communicate
that require an investor’s receipt and review conducted in a limited time period, and to the due diligence team the status of
of various information. Although different in this fact puts a premium on establishing various issues. Attached hereto on the
each instance, these almost always include a systemized process for conducting Appendix is a version of a checklist the
the following: (i) the financial information due diligence as early in the transaction author utilized in a recent transaction.
regarding the property in question; (ii) as possible. In connection therewith,
plans and specifications for improvements someone (usually the transactional attorney) IV. Transactional Issues
and notices from governmental authorities; must “quarterback” the process and be
(iii) obtaining building inspection, soil, or responsible for insuring that the structure is As noted earlier, this section focuses
environmental reports prepared by third- adhered to and deal with the contingencies primarily on issues to consider when
party consultants; (iv) an original or copy as they arise. In general, there are four conducting transactional due diligence,
of any leases as well as management major issues related to limited timing: with the focus on matters that are primarily
and operating contracts; (v) receipt of a the responsibility of the real estate attorney,
preliminary title report and all supporting Counsel should ensure prompt delivery excluding environmental and land use due
documents referenced in the preliminary title of existing information without which the diligence items.
report; and (vi) a survey showing, among process cannot proceed;
other things, the boundary of the property, 1. Lease Review. It is axiomatic that in
location of buildings and other structures on The initial documentation must be reviewed connection with the acquisition of an
the property and plotting all exceptions of and analyzed quickly enough to permit operating asset, lease review is one of
title that are plottable on the survey. counsel and the investor to make further the most important due diligence items
inquiries and arrange for additional studies that investors and their counsel must be
In most cases, the attorney representing to the extent the initial information is concerned with. Of course, the actual
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nature of the asset and tenants can have modify or in some cases completely If any such rights exist, it may be possible
a significant impact on the necessity to change provisions in the main body of the to obtain a waiver or to verify, through
review each individual lease. For instance, lease. Although it is often a tedious task the estoppel certificates or otherwise, that
in connection with a multi-unit residential to ensure that all of these documents are events or conditions that can trigger any of
building or self storage center, investors obtained and reviewed, obtaining and these rights have not occurred. In addition,
may be more concerned with the simple reviewing these documents is a critical part the leases should be closely scrutinized to
economics of the leasing structure and will of the due diligence process. For instance, confirm that there are no expired purchase
only review perhaps a form lease and not serious consequences can arise if exhibits options or rights of first refusal. If such
have the attorney review each individual are inconsistent or not attached as these rights exist, the investor and transactional
lease and/or obtain an estoppel certificate can come back to haunt the investor who lawyer should ascertain if the property
from individual tenants. In connection with stepped into the shoes of the previous owner has been offered to the tenant/optionee
retail centers, office buildings and industrial of the property. in accordance with the contract provisions
buildings wherein the leasing issues are far or that such rights have been otherwise
more complex and leases tend to be for While in most transactions a rent roll will waived or terminated and obtained written
much longer periods of time, it is absolutely be provided to the investor as part of confirmation of the same.
imperative that to the extent feasible the the due diligence process, it is extremely
leases are reviewed not only to verify the important for each lease to be reviewed Finally, the transactional attorney should
economic terms of the leases but also to to verify that the business terms (such as review each lease with an eye to unusual
unearth key legal provisions in the leases rent, expenses, security deposit, and lease provisions that may create an undue
that can affect the investor’s investment terms) stated in the lease corresponds to the burden on the investor. These are often
decision. business terms on which the buyer based pre-negotiated rights to assign or sub-
its pricing of the property. Although it is lease space, damage or destruction clauses
In connection with the actual review of the tempting to simply rely on the summary that are inconsistent with loan terms
leases, it is helpful if this process not be of a rent roll, in more complex real estate secured by the property, limitations on a
undertaken in a piecemeal fashion if at assets that contain specialized leases, tenant’s obligation to pay common area
all possible since the way that the leases investors and their counsel should review maintenance or other operating expenses,
interact with each other is an extremely any provisions that are fundamental to exclusive use clauses, limitation on the
important element of the lease review the investor’s economic assumptions and ability of the landlord to relocate the tenant,
process. For instance, for obvious reasons, consider any lease provisions that have and other similar issues.
a thorough lease review should confirm that the potential to alter the stated numbers
no two tenants have the right to occupy in the rent roll or other abstracts provided 2. Tenant Estoppel. Many investors unduly
the same space. This situation can arise by the seller. Examples of such provisions rely on receipt of written statements from
in connection with improvidently drafted include exemptions of tenants’ obligations tenants (commonly known as “estoppel
expansion rights or other rights to modify to pay for each tenant’s share of the assets’ certificates”) that their lease is in full force
space that may overlap on another tenant’s property taxes and insurance, caps on and effect, that there are no rights of
current or future rights. In addition, care escalator clauses requiring tenants to pay offsetting against rent, and other assurances
should be taken to ensure that the common for increased operating costs, exemptions regarding status of the lease.
areas are defined consistently in all of the on tenants paying increased property taxes
leases, that no tenant’s use of the common in the event of a reassessment and similar Most estoppels will attempt to confirm key
area conflicts with any other tenant’s rights, clauses. information such as:
that common area maintenance and other
charges are consistently defined in all of the Another extremely important issue that the (a) Absence of knowing defaults by the
leases and to ascertain whether any tenant attorney should verify is that there are no landlord;
has the right to expand into any portion of obstacles or unsatisfied conditions in the
the common areas or otherwise impede assignment of a previous owner’s interest (b) Absence of rental offset rights;
the landlord’s ability to utilize, modify or in the leases to the investor. In connection
otherwise change common areas, parking therewith, special concern should be given (c) Set forth options to extend the term or
arrangements or access rights. to the need by the investor since standard extend the premises;
subordination and attornment provisions in
Once counsel is sure that it has all of the leases can mean very different things if the (d) Confirm the lease commencement
leases, the next step should be to insure that investor is a purchaser or acquires interest date;
all amendments, modifications or ancillary in the real estate asset through enforcement
documentation (such as exhibits, guarantees of a lien. (e) Confirm the lease term; and
or subordination attornment agreements)
are included. These amendments and other Investors and their counsel should also (f) Confirm all amendments, modifications
ancillary documents often contain extremely ascertain if any of the leases contain the or revisions to the lease.
important legal provisions that significantly right of early termination or rental offset.
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Estoppel certificates are essential in serving realty, this is an additional representation to title, third-party monetary encumbrances
an important function, but they do not and warranty from the seller that leases are removed as of closing. This, however,
replace thorough and careful lease review. are in full force and effect. These generally is often not the case in connection with
For example, tenant estoppels do not, absent have absolutely no protection in connection liens assessed but not yet due in connection
a clear and stated intent to the contrary, alter with protecting the investor against claims with taxes, bonds and other governmental
amended leases that are inconsistent with of the individual tenants; however, seller’s requirements. As such, it is absolutely
the tenant certificate. Nor do they prevent estoppels can be useful in connection with imperative that title and all supporting
a tenant from raising problems or issues certain assets such as multiple residential documents be reviewed in order determine
discovered following execution, even if properties and self storage units wherein if the property in question lies within a
they existed when the tenant delivered an obtaining a single estoppel from each special assessment district, whether the
unqualified estoppel certificate. In addition, tenant is impractical. owner of the property has any maintenance
in the common estoppel certificate, many, or repair responsibilities for its own property
if not most, representations regarding Title and Survey Review. This article considers or surrounding property or for any other
the landlord’s conduct are limited to the title and survey review together because they unusual assessments affecting the property.
tenant’s knowledge. Accordingly, counsel are inter-dependent. In general, it is difficult If such obligations are recorded against
should use the standard estoppel certificate to adequately investigate title without the property, any owner of the property will
primarily for investigation purposes to reviewing the location of each “plottable” be deemed to assume these obligations
smoke out potential problems and not as title exception. In like fashion, any attempt and such encumbrances should be taken
a substitute for further review of the leases to have a survey review without making into account by the investor in order to
themselves. sure that each title exception is shown on ensure that they do not adversely affect the
the survey, has limited utility and, even if the investor’s valuation of the property.
While it is tempting to incorporate as much exceptions are all plotted on the survey, the
detail as possible in an estoppel certificate, transaction lawyer must be able to reference Covenants, Conditions and Restrictions.
such attempts may not be practical both the underlying documentation reflected on Covenants, conditions and restrictions,
because there is not sufficient time to custom the plotted exceptions in order to ascertain reciprocal easement agreements and other
draft each estoppel certificate and because third-party rights in connection therewith similar recorded documents (collectively,
many tenants will refuse to execute an and potential limitations on the utilization “CC&Rs”) are often lengthy, cumbersome
estoppel certificate that contains too much of the real estate asset or improvident and convoluted. Nonetheless, they comprise
detail. In addition, there is a significant placement of improvements thereon. one of the most important documents that
danger that if an investor actually attempts absolutely must be reviewed and understood
to incorporate all business terms into an As in lease review, a review of title and by the transactional attorney in providing
estoppel certificate and misses certain survey must be done comprehensively with due diligence assistance. For example,
key issues, these issues will be deemed an eye towards considering how all of the CC&Rs may prohibit a property’s use as
waived by omission. The better practice is relevant documents relate to each other. a supermarket. The attorney reviewing
usually to attach a copy of the lease and all title must make sure not only that no
amendments to the estoppel itself and have Without exception, one of the first things supermarket presently exits on the property
the tenant simply certify that the attachment that an attorney should ensure when but also that the client does not intend to
is correct and a complete copy of the lease undertaking due diligence of real estate construct a supermarket on the property
and all amendments thereto. assets is to obtain the preliminary title report or convert an existing building to that use.
and thoroughly review each and every Again, the valuation of the property may
Even given the inherent limitations of document supporting the exceptions set have been based as much or more on the
estoppel certificates, proceeding without forth on the preliminary title report to ensure expectation that it can be redeveloped in a
key estoppel certificates can be extremely that they are complete and legible. way that proves to be prohibited as on the
risky in certain transactions. For instance, in existing use.
connection with a large or long-term tenant Use Rights/Financial Items. One of the
for which a decision to obtain investment most significant encumbrances that must Finally, one should attempt to obtain
property is a critical element, estoppel be ascertained at the beginning of the due estoppel certificates assuring that there is no
certificates provide certain protection that diligence process is whether any third- present violation of the CC&Rs with respect
there is not trouble in connection with the party rights to own or use the property exist to existing structures or uses. Such estoppels
lease and may provide a defense against (purchase options, rights of first refusal and/ may come from the “Declarant” under
certain contrary factual assertions or legal or reversionary interest) and if any monetary CC&Rs established as part of a recorded
contentions by the tenant at a later date. obligations are recorded against title that subdivision or from neighboring property
will not be removed at closing. For instance, owners who may have enforcement rights
Finally, in some transactions, it may be unless the investor is assuming the existing under less elaborate restrictive covenants.
impractical to obtain estoppel certificates financing, most well-drafted transactional Although CC&R estoppels are subject to the
for each tenant. In such circumstances, documents provide that notwithstanding same limitations as tenant estoppels, they
a “seller’s estoppel” may be obtained. In any other objections raised by the investor also have the same strengths. They are a
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potential source of important information, when reviewing the location of underground negotiate a solution before closing.
and they may effectively estop the estoppel- utility lines. If these concerns cannot be
giver from subsequently asserting a contrary addressed by amendment of the recorded Survey Requirements. All necessary
position. easements, or an appropriate title insurance information must be contained on the
endorsement, the existence of the easement engineering survey, and the client must
Utility and Other Easements. Easements becomes part of the investor’s business risk understand each reference and symbol
in favor of utility companies are common analysis. on the survey. It may be necessary to
on commercial properties. Ideally, the request second (and sometimes third)
recorded instrument granting the easement Issues regarding potential encroachments drafts of surveys after determining that
includes an indemnification of the property over utility lines can be evaluated only by necessary information is missing or that the
owner for any loss or claim resulting from obtaining “as built” plans for improvements survey contains unlabeled or ambiguous
the utility company’s use of the easement and having improvements and existing markings. The survey should provide
area; provides for reasonable relocation easements plotted on the engineering sufficient information to determine zoning
rights to accommodate future development; survey. There is another reason to have compliance, which is frequently missing
and provides for restoration of the property the location of underground utility lines and in the first version of an engineering
after installation, repair, or removal of driveways and other access routes added to survey. Preparing a detailed list of survey
conduits or other facilities. It is also the survey. It is important to ensure that all requirements and a comprehensive form of
desirable for the easement to clearly define utility lines and rights of way to and from the surveyor’s certificates (stating that certain
the uses permitted by both the grantor and property connect directly to public conduits enumerated items have been shown on
the grantee on the easement area. and thoroughfares, respectively, without the survey), and forwarding them to the
crossing over privately owned property. surveyor before commencement of the
Unfortunately, such provisions are often Otherwise, the affected property owner can job, may dramatically reduce the changes
lacking in standard utility easement act or threaten to cut off access or utility necessary in subsequent iterations.
instruments. Most, especially those entered service to extort some economic concession
into many years ago, contain hardly any from the buyer. If access or utility line
terms. Utility easements without protective or encroachments of this nature are discussed
explanatory language, although troubling, and a proper easement cannot be obtained V. Building Permit and Certificate of
will rarely scuttle a transaction. When before closing, an indemnity from the seller Occupancy Review
confronted with such an instrument, there may be the only viable solution.
is little to be done except to verify that there In performing transaction due diligence,
are no existing or proposed improvements Boundary Encroachments. When reviewing counsel should review copies of certificates
located in the easement area. Parking areas, the survey, the attorney should specifically of occupancy and major building permits.
small shacks, temporary or easily movable locate the boundaries of the property, all Some jurisdictions instead evidence
enclosures, and shrubbery-type landscaping structures located on the property, and all authorization of occupancy by final building
are usually acceptable encroachments. easements to confirm that there are no permit sign-offs. The lawyer must discuss
Minor building encroachments on utility boundary encroachments. Counsel may the applicable procedure with the local
easements are also ordinarily not a accomplish this in consultation with, or building inspection authority to determine
problem, especially in California, where by delegation to, the surveyor or project the form of approval available for the
title companies frequently issue California architect. property and the significance of any missing
Land Title Association (CLTA) Form 103.3 documentation.
endorsements (no forced removal) to buyers Boundary encroachments by neighboring
and lenders. structures are rarely a problem, especially
if the historic use has had no detrimental
Major building encroachments are not impact. An on-site structure or easement Ultimately it is not the lawyer’s job to
so easily resolved. If a large building is encroaching onto neighboring property determine current compliance with building
located above an underground utility line, is potentially a far more significant issue. and safety codes. This evaluation should
it is unlikely that the structure will need to Although the long-term, uncontested be completed by a qualified engineering
be razed or moved, although that possibility existence of such a structure or easement or architectural consultant. Indeed, even if
cannot be dismissed. It is more likely that provides some comfort, the encroachment there is a certificate of occupancy for every
future maintenance and repair work by the is technically a legal trespass. Relocation of existing tenant and a final building permit
utility company will require removal of the an easement is frequently a simple matter; for every building or street address at the
floor in the building for some period, which however, the impossibility or difficulty of property, a tenant or previous owner could
would obviously disrupt existing operations relocating a large, encroaching structure have performed unpermitted work at the
and might even permit affected tenants to may lead to legal action against the owner site after the issuance of the certificates of
terminate their leases. Potential disruption and costly structural modifications or occupancy or building permit. Thus the
or interference with crucial parking areas monetary damages. The only acceptable review of the building department files
or access ways should also be considered approach is to identify the problem and is simply part of a more comprehensive
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inquiry and is intended as only one source assumption. About the Firm:
of information.
4. Taxes, Assessments and Fees. An Jackson DeMarco Tidus & Peckenpaugh
VI.Other Due Diligence important part of the due diligence process has offices in Irvine and Westlake Village and
Responsibilities is identification of the taxes, assessments is recognized as a preeminent California
and fees associated with the transaction full service law firm, offering high quality,
1. Party Formation and Authority Documents. and the subsequent ownership of the innovative, responsive and cost-effective
The lawyer must review the formation property. Documentary transfer taxes, bulk solutions to meet client needs. Through
documents of the seller, particularly when sales taxes on personal property, and other our industry reputation, we frequently act
partnerships are involved, to ensure that (i) transactional taxes should be identified and as counsel for non-California law firms
all necessary approvals for the transaction quantified. on transactions and litigation matters.
have been obtained before closing; and We represent clients in key California
(ii) the seller, and the individuals who 5. Tax Withholding. Under certain federal industries, including agriculture, energy,
execute documents on its behalf, have the and state tax laws, a “reporting person” emerging technologies, life science, real
authority to enter into and consummate the (usually a title company or other escrow estate development and finance. More
transaction. The seller ordinarily represents holder, but, if no escrow is involved, the information is available at www.jdtplaw.
in the purchase agreement that it has buyer) must withhold a specified percentage com.
the requisite authority to enter into, and of the sale proceeds if the seller does not
perform its obligations under, the purchase certify its nonforeign status. (IRC §§ 1445, Orange County Office:
agreement. The “bootstrap” nature of 6045(e); Rev & T C § 18662.) Failure 2030 Main Street
such assurances should be obvious; if to (i) withhold or (ii) obtain the requisite Suite 1200
the signatory cannot bind the seller, its certificate or other appropriate evidence Irvine, California 91614
representation is unenforceable. The that withholding requirements do not apply, tel 949.752.8585 fax 949.752.0597
buyer’s lawyer must independently confirm could result in the imposition of some or
that these representations are true. all of the seller’s tax liability on the buyer. Ventura County Office:
Accordingly, the lawyer must review, and 2815 Townsgate Road
2. Confirmation of Seller’s Continued ensure compliance with, the applicable tax Suite 200,
Existence. Lawyers often spend a great withholding requirements before closing the Westlake Village, California 91361
deal of time negotiating representations, purchase transaction. tel 805.230.0023 fax 805.230.0087
warranties and indemnities in a purchase
agreement, without any serious consideration 6. Uniform Commercial Code Searches. Disclaimer:
of the status or creditworthiness of the party If the buyer is acquiring any significant
giving such assurances. In many real estate interest in personal property, the lawyer This newsletter has been prepared by
transactions, real estate assets are held by should obtain a UCC search to ascertain Jackson DeMarco Tidus Peckenpaugh and
single purpose entities whose only asset the existence and priority of any third party is intended for informational purposes
is the property to be conveyed. As such, security interest affecting such property. ONLY. The information provided in this
in certain circumstances, the investor may newsletter is provided only as general
insist on either holding a certain amount of About the Author information, which may or may not reflect
the sale proceeds in escrow for a specified the most current legal developments. The
period or obtaining a guaranty from the Glenn A. Fuller is opinions expressed in or through this
entity affiliated with seller to cover the an attorney in the newsletter are the opinions of the individual
seller’s contingent liabilities. In addition, Westlake Village author and may not reflect the opinions of
certain insurance products are available to office of Jackson Jackson DeMarco Tidus Peckenpaugh or
provide coverage for representations and DeMarco Tidus any individual attorney.
warranties. & Pe c k e n p a u g h
and concentrates Transmission of the information contained
3. Assumption of Underlying Debt. If his practice in the in this newsletter is not intended to create,
a buyer intends to assume any existing acquisition, sale, and receipt does not constitute an attorney-
financing encumbering the investment exchange and client relationship between you and
property, it is imperative that the attorney development and Jackson DeMarco Tidus Peckenpaugh.
review all applicable loan documents to redevelopment of real property, secured This newsletter is not a substitute for legal
confirm the business terms stated in the financing transactions, leasing, and his clients advice from a qualified attorney licensed in
loan documents are acceptable to the range from commercial and residential the appropriate jurisdiction.
investor, verify that the loan documents developers, publicly traded companies, to
may be assigned and assumed, and, if institutional parties and individuals. He can
necessary, obtain the lender’s consent, and be reached at 805.418.1925 or gfuller@
identify any hidden costs associated with the jdtplaw.com.
