The California Real Estate Planning Process
The real estate development planning process involves four key areas:
- Property Acquisition. Everyone knows that the three most important things in real estate are location, location, and location. What surrounds your development will likely make the difference in the success or failure of what you develop. Furthermore, California law specifies that counties and cities create and enforce zoning ordinances that drive and control development.
- Planning. This area involves meeting the requirements your will need to garner approval from city or county governmental entities. You will need to address zoning laws, annexation, incorporation, environmental regulations, and more.
- Financing. Real estate development costs money, so you will need a lender with the resources and commitment to finance your project. With many developments, you will need to provide proof of financing as part of the governmental approval process.
- Project Teams. The size and scope of the team you assemble to bring to fruition your plans will depend on the project. It may require teams to address planning permission and permits, architects, budget experts and accountants, contractors, and project managers. A real estate development attorney should be on the team as well.
The Contract Phase
There are four broad areas involved in the contract phase of the project. Having an experienced real estate development attorney play a key role in each of them should mitigate the potential for errors that could prove costly.
- Negotiation begins with acquisition and continues throughout the process as you enter into contracts with architects, financial organizations, contractors, suppliers, and more.
- Documentation is critical to any real estate development should any disputes arise during the project.
- Due Diligence, ensuring that all legal issues are addressed, is required throughout the process. It is involved with permits and zoning, financing and acquisition of property and project costs, and addressing environmental issues, property access, utility access, and passing inspections.
- Zoning and Permits may involve multiple entities, including governmental bodies, surveyors, utilities, architects, environmental agencies, and various inspectors.
A real estate developer has options for the construction of a project. Some form their own construction company, but supporting a company would require a plan for ongoing projects or contracting jobs out to other developers. Having your own construction company means operating and managing an entity every day regarding employment, payroll, benefits, training, licensure, and liability insurance.
You can also contract with an external construction company to handle that part of the project. That company would absorb all of the responsibilities, obligations, and risks while you or your project manager oversee contract compliance, deadlines, and other matters removed from the day-to-day construction operations.
Regardless of the size of the project, one sure occurrence will be disputes. These could arise between you and anyone else involved, including contractors, inspectors, financers, governmental and environmental agencies, and more.
Beginning the process with carefully crafted and fully executed contracts and other documents will mitigate the possibility for disputes to occur. Your attorney will play a critical role in resolving disputes as they arise with expediency while advocating for your best interests.
Choose the Right Real Estate Attorney
Being a real estate developer anywhere is a huge task. Being one in California is even more competitive and complicated, putting you at greater risk if your development fails. Retaining an experienced California real estate development attorney to handle all the legal requirements of a project is a wise investment.
At Martinez Law Office, I work with developers in Santa Ana, Orange County, and throughout Southern California and perform exhaustive due diligence, draft and review contracts and other documents, and help resolve disputes as they arise. Time is money with any real estate development project, so I am dedicated to handling my clients’ legal matters expertly and expeditiously.