Real estate negotiations

How a lawyer can help you in negotiations?

  • Negotiations on the real estate market most often concern the conditions of the purchase of real estate, rental of premises or cooperation in a joint investment.
  • Conclusion of any contract should be preceded by negotiations, during which the parties will discuss all the details of the transaction and anticipate potential conflicts or disputes that may arise in the future.
  • Negotiations are usually difficult because the parties who are most often in good relations need to agree on how they will secure their interests in the event of non-performance of the agreement. A lawyer who participates in negotiations has an appropriate distance to the case and is able to find solutions securing the interests of both parties.

What are the most important steps in negotiations?

  • Preparation: Negotiations should be preceded by preparation of appropriate arguments. During the preparations, we determine possible risks, the expected result, and prepare proposals that will be acceptable to the other party.
  • Negotiations: In the next stage, we implement the negotiation strategy. Participation of a professional lawyer is also recommended at this stage, because it strengthens the position of the entrepreneur in the eyes of business partners and minimizes the risk of making decisions which may have a negative impact on the outcome of the negotiations.
  • Preparation of the contract: The final stage is drawing up a contract, i.e. writing down the parties arrangements in such a way as to guarantee their performance and avoid any interpretation doubts in the future.
Real estate negotiation most often involves the following issues:
Negotiation of real estate purchase conditions
  • Negotiations concerning the terms and conditions of sale of a real estate should be preceded by analysis of the legal status of the property, because any identified irregularities will be used as crucial arguments in further negotiations with the seller
  • Negotiations usually involves issues such as:
    • real estate price
    • date and method of payment of the price
    • method of securing payment of the price
    • date of handing over the property
  • In case of more complex transactions, the subject of negotiations are the rules of conducting legal audit of a property – a result of such discussions should be conclusion of a preliminary agreement, where the parties determine the time available for the buyer to conduct due diligence and terms of withdrawal from the purchase if any irregularities are discovered.
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Negotiations regarding commercial premises rental
  • A rental agreement for commercial premises is usually concluded for many years without any possibility of prior termination, therefore the purpose of the negotiations should be to define detailed conditions of the rental, so that the lessor and the lessee are aware of all their rights and obligations
  • Negotiations regarding the terms of commercial premises rental usually concern:
    • the rent amount
    • the method of securing the rent payment by a deposit, promissory note or statement on submission to enforcement, guarantee, etc.
    • sharing of the costs of adapting the premises to the tenant’s business (e.g. restaurant, office, store, etc.)
    • rules for carrying out repairs, renovations and alterations to the premises
    • the right to terminate the lease agreement in extraordinary cases, such as failure to pay rent on time, serious breach of the lease agreement by one of the parties, etc.
  • Negotiations should be finalized by preparing a lease agreement that secures the rights of both parties in a legally compliant manner
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Negotiations regarding cooperation terms
  • The purpose of negotiating a company agreement or other cooperation agreement is to identify the mutual interests of the parties and any possible differences to enable potential business partners to start working together as soon as possible
  • Having a professional lawyer involved in the negotiations allows you to quickly identify and settle upon secondary issues in order to focus the attention on the important items
  • Negotiations of cooperation terms on the real estate market usually concern:
    • articles of association – the commercial law leaves the shareholders quite a lot of discretion regarding the provisions of the articles of association, therefore it is recommended to consult a professional lawyer in order to properly adjust the agreement to the business goals of the certain project
    • contracts with an external investor – preparation of a proper agreement for investment financing, which will secure the interests of all parties and enable efficient transaction handling, requires consultation with a lawyer having a good understanding of the real estate market specifics
    • cooperation agreement concerning a particular project – a solid cooperation agreement is crucial for the realization of a business project according to the parties’ assumptions
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