Bell Legal Services

Role of an Attorney

02/28/2015

What is the job of an attorney in a commercial/real estate transaction? Thanks to Hollywood and people‘s limited exposure to this side of the legal practice, few people really understand what we do.

Our primary job is to listen to our clients and determine their goals and objectives. This is not as easy as it sounds. Many clients start by telling you the business terms of their deal, which may or may not tell you what they are trying to achieve.

One client came to us to discuss the sale of an office building in mid-town Houston. They‘d been talking to a prospective buyer and had a list of terms that they wanted us to use in creating a sales contract. On the surface, it appeared that their objective was to sell an asset at a profit and use the proceeds for some immediate need.

I asked the client directly, “What are you going to do with the proceeds?“ They were a little irritated that I would ask such a question and probably wondered why I needed to know this. Reluctantly, they admitted that they wanted to donate some of the money to a charity. The rest would go to their children after they died. They admitted that they did not know what to do with the children‘s share. Of course, a large portion of the sales proceeds would go to pay taxes, but they wanted to make sure that their children did not have to deal with the headaches of owning and managing the building.

They also admitted that they were not getting the price that they‘d hoped for.

In the end, it was clear that their objective was not to sell the building, but estate planning.

After discussing some other options, they agreed to meet with an estate planning attorney and we were able to work out a plan that suited their needs much better and saved them a substantial sum of money. Instead of selling the property, they obtained a loan. They also purchased additional life insurance to pay off the loan when they died. The building was located in a desirable part of town and was producing a good return on her investment. With reputable, professional management in place, the children would not need to worry about the day-to-day affairs. We also put the building into a limited liability company that contained buy-sell provisions in the event that the children disagreed as to the sale of the property.

Bottom Line: In order to do our work effectively, we need to know more than just the terms of the deal. We need to know what the client wants to achieve. From there, we can structure the transaction in a way that best meets those objectives.



William M. Bell, Jr.