LEGAL ISSUES IN REAL ESTATE DEVELOPMENT
Chris K. Safarian
Course Content and Goals.
RED 562 is an intensive course on the study of various subjects in the law applicable to real
estate development and the application of such laws in the context of acquiring, financing,
developing, managing and disposing of real estate.
The course is designed to familiarize you with the various complex legal issues involved in real
estate development and give you the necessary tools to navigate them. During the course of the
semester, you will learn to identify legal issues, avoid legal problems, negotiate and structure the
acquisition, finance, development, management and disposition of real estate, and to use your
legal counsel effectively and efficiently.
The course will begin with an introduction to the history of the law and the approach to studying
the law within the context of real estate. Throughout the course, we will cover various areas of
the law including contracts, real and personal property, environmental, corporate, tax,
constitutional , bankruptcy and torts.
In each segment of the course, we will begin with a general overview of the law applicable to the
subject matter. Thereafter, we will apply the legal concepts in the context of actual transactions
including, letters of intent, purchase and sale agreements, notes, deeds of trust and other finance
documents, leases, construction and architect's agreements, management agreements, franchise
agreements, and entity documents.
LEGAL ISSUES IN REAL ESTATE DEVELOPMENT
The course text is Klayman & Karp, Real Estate Law (7th Edition 2009). Assigned reading is set
forth on the attached course outline/schedule. In addition, we will read articles and review
documents relevant to the subject matter in each segment of the course – I will advise you of the
need to download these additional materials from Blackboard in advance.
We will have two (2) in-class (closed book) exams – a midterm exam and a final exam (see
attached course outline for exam dates). The midterm exam will cover course material covered
as of the date of the midterm and the final will be comprehensive.
Class Participation (10%) – Class attendance and participation in class discussion.
Midterm Exam (40%)
Final Exam (50%)
Paper (Optional) You may write a 10-15 page paper on a topic covered in the course that is of
particular interest to you. If you would like to write a paper you must submit a topic to me in
advance. Papers will be due March 13th.. Submission of a paper can only improve your overall
grade in the class.
Returned paperwork, unclaimed by a student, will be discarded after four weeks and hence will
not be available should a grade appeal be pursued following receipt of his/her grade.
Students with Disabilities.
Any student requesting academic accommodations based on a disability is required to register
with Disability Services and Programs (DSP) each semester. A letter of verification for
approved accommodations can be obtained from DSP. Please be sure the letter is delivered to
me as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. - 5:00
p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.
The University as a place of learning is necessarily dependent upon the highest standards of
personal and intellectual integrity. As members of the academic community, we all share the
responsibility for maintaining this environment so that the enterprise may flourish in an open and
honest way. An individual who is unwilling or unable to support these standards should not be
allowed to remain in the University.
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Date Topic Subjects Reading
1/12 Introduction to Course Introductions;
Administrative Matters –
Introduction to the Law Overview of Course;
Sources of law.
various sources of the
law. Where to find the
Property What is property? Real 22-37; 40-65; 184-204;
vs. personal property.
Other interests in real
property. Easements and
1/19 Property Continued Estates in land; Various 68-82; 84-104; 108-132
forms of holding title;
condos, coops, time
shares & REITS
Contracts Elements of a contract; 208-233
parol evidence and the
statute of frauds; statute Bernhardt Article
of limitations; implied
contracts; joint and
warranties; third party
beneficiaries; time is of
the essence; default and
1/26 Agency and Brokerage What is a listing 264-295
agreement? What are the
rights and obligations of CAR Listing Agreement
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each party to listing
principles of agency law.
Purchase and Sale Letters of intent; 236-262; 440-457;
Transactions Purchase and Sale
Agreements; Due Purchase and Sale
Diligence and Other Agreements; PTR;
Contingencies; Closing Owner's Title Policy;
Documents; Closing Instructions; Closing
Costs; Casualty; Statement
2/2 Purchase and Sale
2/9 Finance Transactions Term sheet/commitment 488-526
letter; construction loans;
bridge loans; permanent Form Note; Deed of
loans; mezzanine loans; Trust; Form Guaranty;
mortgage liens; lien Form SNDA; Other
priority; liens on rents Form Loan Documents;
and other personal Lender's Title Policy
documents; default and
2/16 Spring Recess
2/23 Midterm Exam First half of class
Real Estate Tax Federal, state and local
capital gain; deferral of
gain recognition; 1031
exchanges; at-risk rules;
property tax; limits on
3/2 Leasing Nature of tenancy; rents; 134-182
term; CAM charges;
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subletting; default and Form Lease; Form
remedies; residential, Estoppel Certificate
industrial and office
leases; ground leases.
3/9 Construction Agreements Licensing laws; contract AIA Forms
Architect's Agreements construction defect
liens; surety bonds;
contracts and AIA forms.
3/16 Management Agreements Property management; Form Management
leasing agent agreement; Agreement; Form
Leasing Listing agency law; hotel Franchise Agreement;
Agreements franchising. Comfort letter.
3/23 Business Entities Corporations, Organizational
partnerships, limited Documents; Bylaws;
liability companies; Operating Agreement
piercing the corporate
veil; fiduciary duties; tax
3/30 Environmental Law Liability for 626-647
discharge laws; clean air
and water laws; liability
for disposed waste;
investigations and role of
consultants in evaluation
4/6 Torts Theory; duty; breach; 298-313
intentional torts to
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person; to property;
negligent torts; strict
vicarious liability; joint
liability and comparative
4/13 Insurance Insurance Contract; types
of insurance and what is
insurers' defenses to
role of insurance agents
Role of Lawyers Engaging lawyers; Form of engagement
ethical obligations of letter; conflict waiver
lawyers; conflicts; letter
4/20 Review/Final Exam
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