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Success in real estate on any level requires ethics. My goal in development is to follow the law and use the law in my favor to create value. I am fond of the property law and contracts discipline because legality provides a sense of surety to assumption-based realm of real estate through zoning and development regulations, private restrictions and easements, comprehensive plans, capital improvement programs, etc. Laws and contracts foster performance and it is imperative for all parties involved to have a deep understanding of what is required of them. How can one be a good player in any game, especially real estate, without first knowing the rules?
Tarpon Pointe Recommendation Memo.docxDue Diligence Investigation - Tarpon Point Marina, Florida
The following document is from a case study of the Tarpon Point Marina development in Florida. This lesson was important in my understanding of the importance of due diligence and especially contractual due diligence. The conveyance of land through a purchase and sale contract may come with a feasibility period in which risk can be avoided or appropriately priced; however, the true risk in real estate is that there is rarely enough time to fully prove true all of the development assumptions during this period.
Contractual due diligence encompases an understanding of documents such as: lot contracts, LOIs, leases, deeds, loan agreements, guarantees, etc. Once again, understanding the contractual responsibilities of a development can help a developer resolve issues/disputes, save time, and properly budget for contingencies.
In the Tarpon Point case study, I learned that uncertainty or blatant ignorance of riparian rights has created unforeseen litigation from state and federal agencies. The development proposal purposefully excluded a Soverignty Submerged Land Lease, information requested in response to the Marina Permit Request, and Environmental Operating permits from several agencies. As previously stated, ethics are important in this business and one deal is not worth one's integrity.
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