Expert: Jim Avancena, CPM - 5/15/2010

Question
QUESTION: Hi Jim,

I would like to present a "counter contract" for a industrial commercial land lease that is designed to have all the protections to the landlord against unfair up front commissions and all the loopholes written into the contract presented to me recently.  It seems that the largest U.S. Commercial Brokers have all the protections in their contracts which often times create litigation down the road.  Can you direct me to someone who sells "Clean Listing Agreements" that help protect the landlord on all the major points a lease listing contract must contain?  
Can't afford the quotes from real estate attorneys to draft a personalized contract.  But feel with a good/simple contract I could tailor it to protect me then run the final through an attorney.  Can you help me here?  Thx, Jan

ANSWER: Jan -

I am not optimistic that seeking "clean listing agreements" will help you.

I represented one of the largest retail big box firms in the country for ten years and never presented or received a listing agreement or land contract that did not have significant aspects of it re-negotiated and re-written.   Some agreements are less onerous than others, but the hidden problems seem to go with that this type of transaction.

Additionally, these days many commissions are commonly paid "up-front", but that is after any study periods, due diligence, or other provisions added to a contract to allow the buyer to do specific things it has requested to do before having to take possession /ownership of the property irrevocably own and pay you.

You will probably find that even if you develop your own "safe" listing agreement, a majority of brokers are going to ask that you revise certain provisions.  I think it would be better that you retain a reasonably priced experienced attorney to review any documents you suggest AFTER you have picked out all the issues that you find unacceptable.   If you get a listing agreement or contract that is thoroughly filled with problems, just send it back.

Good luck.

-Jim   


---------- FOLLOW-UP ----------

QUESTION: A follow-up to my last question.  I was referring to finding a contract pertaining to commercial leasing for land.  I think you responded to contracts and commissions related to sales.  I'm okay with these contracts, have used two basic ones before, the leasing contract is where I need a source to just find documents that I may taylor to my needs since I don't have access to the CBA; just thought you could recommend a source.  thanks,  Jan

Answer
Jan-

You might check with the local bar association, being sure to tell them you are a local commercial property owner and would like to speak with one of their real estate specialists.  They may be eager to help you in order to create a relationship.

You might also look on-line.  I usually simply go to reference style real estate books and work from the "What to watch out for in a commercial land lease listing agreement" section or similar information.   

I have been in this business for so long that I seem to remember what I didn't know I knew each time I do any form of contract or I call one of the many attorneys I work with often on transactions.

Good luck,

-Jim