February 6, 2020
New development opportunities in great sections of town mean developers are recognizing the chance to re-develop a site for higher or better use. In these cases, the landowner of the property can reap huge benefits over a long period of time, often 50-99 years and still retain the land. However, legal experts caution landowners who may be considering a redevelopment project to be aware of their options before signing onto a development deal.
In the event of a re-development, the developer would most likely mortgage the property. Should the developer default on the mortgage at any future point, the mortgagor or lender would be able to take the land in addition to the building. Certainly, a landowner would not want to have to maintain or pay mortgage payments on an empty building but losing the land would be an even worse scenario. Getting the right legal advice is imperative for landowners to ensure long-term protection of their assets. While developers and lenders can make a convincing case for their expertise in the market, many were greatly impacted in the last recession. With another market downturn expected within the next few years, landowners should be discerning in choosing the right timing and development opportunity.