Real estate (or commercial property) lawyers might advise on the acquisition, sale, transfer, financing and operation of – as well as any ongoing dealings with – tangible assets such as buildings and land. They may also deal with other assets and infrastructure, although firms might have dedicated teams for this (e.g. shipping or aviation teams). 

In addition to drawing up the relevant contracts, real estate lawyers may also work on: large regeneration projects; leasing or licensing arrangements, including advising on the interpretation of existing clauses; and real estate disputes, alongside disputes lawyers. Note that larger or specialist firms may also have sub-teams that specialise in planning law and construction.

On corporate-led transactions or finance-led real estate financings, real estate teams are likely to provide due diligence support in connection with elements of the transactions that involve property (e.g. reviewing documents relating to the properties over which security will be granted, or properties being transferred as part of an acquisition). As part of the due diligence process, real estate lawyers may have to ascertain: 

• Which assets are actually included in the deal; 
• Who owns the assets and whether the seller has the legal right to sell those assets; 
• Whether any assets are subject to a lease that is approaching expiry (or whether there are other red flags in the lease, such as very restrictive assignment provisions, which could be problematic if the purchaser has future plans to transfer the lease to another company within its group); 
• Whether the assets are subject to any security (e.g. mortgages) or third party interests (e.g. rights of way granted to third parties); and 
• Whether restrictions exist that, for example, prohibit development upon – or limit the use of – any land involved.

The level of real estate due diligence that will be carried out in a deal context will depend on timescales and how important the real estate is in the context of a transaction (including the value of the real estate in question). For example, clients on a tight budget are less likely to ask a firm to carry out in-depth real estate due diligence if property only represents a small proportion of the overall deal value. As an alternative, insurance may be available to cover unknown potential liabilities (e.g. in situations where it is not possible to “requisition” (i.e. source) all the results from real estate searches prior to completion).

At times, large corporate firms' real estate teams may take on a role more akin to corporate teams, as many high value properties are – largely for tax reasons – owned by special purpose vehicles (these are essentially shell companies whose only purpose is to hold a particular property or collection of properties). In an acquisition context, if a property is owned by a special purpose vehicle, the buyer will usually acquire the shares in that special purpose vehicle (rather than buying the property directly), meaning real estate lawyers may get involved in the negotiation and drafting of the agreement to acquire those shares.

Why do trainees enjoy real estate seats?

The variety of work undertaken by a firm’s Real Estate team may appeal - from acquisitions, disposals and property developments, to leases, licenses and planning permission applications – as might the idea of working on deals involving tangible assets (as opposed to financial products etc.) and a range of both large and smaller deals. 

Note that we cover the role of real estate lawyers in the context of a transaction in our A law firm's role on a transaction case study. 

In addition, our M&A course includes explanations of some of the issues and processes that transactional lawyers often need to advise on.