The San Antonio Business Journal quoted Haynes and Boone, LLP Partner Frank Ruttenberg in its 2018 South Texas Law Review Roundtable, where he provided insights on real estate law.
Here’s an excerpt:
Q: What do you see as some of the challenges facing the San Antonio real estate market?
Ruttenberg: Like much of the state of Texas, San Antonio has been experiencing a prolonged period of increasing values and prosperity in the real estate industry. For those of us who have been in the industry for a while, we know that real estate is cyclical, and a robust market will, at some point, go through a slow down or correction. When this occurs, it is inevitable that legal issues will arise. The good news for those of us who live and work here in San Antonio is the fundamentals driving the success of our real estate boom are continuing to strengthen. For those who felt a bust in the cycle was imminent, it seems all indications are this will not occur in the immediate future. With all this good fortune, you might conclude legal issues relating to real estate matters may be on the downturn. However, due to the frenetic nature of the real estate market, there seems to be no shortage of legal disputes in this area of the law. There is plenty of room for people to make good investments in real estate in San Antonio, but they need to avoid making costly legal mistakes.
Q: What are some of the most common legal mistakes you have seen clients experience?
Ruttenberg: While legal disputes come in all shapes and sizes, in my 37 years of experience they usually can be traced back to one of three sources, not doing your homework as to the property you are buying or leasing, not understanding and documenting the business deal you are making and, if you have partners in your investment, not doing your homework on the partners and properly documenting your relationship with your partners.
Q: Can you share with us some way to avoid these problems?
Ruttenberg: With real estate you must do your due diligence on the property. You have to have title reviewed, review any applicable restrictions on use, obtain a good survey of the land and improvements, an environmental audit, and a thorough study of the improvements as to their condition and their compliance with the law. Your contract should also require the seller to provide information they know of the property that would be helpful for your review. Many of these same issues are important even if you are only leasing the property. Every one of these steps is important. Missing any one of them, or taking a shortcut, raises the likelihood of a mistake. ...
To read the full article, click on the PDF linked below.
First appeared in the San Antonio Business Journal March 30, 2018.