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Partnership dispute could derail real estate deal

| Feb 12, 2016 | Real Estate Disputes |

Many complex real estate deals begin with an informal agreement between the parties to pursue a project. Only after much planning and negotiation is the proposed transaction reduced to writing. Sometimes, however, the course of events doesn’t quite live up to the expectations of one or both parties. An example of how an apparently mutually beneficial redevelopment proposal can jump the rails is provided by a real estate dispute that has arisen in suburban Philadelphia.

In 2013, the St. Charles Borromeo Seminary decided to lease or sell much of its campus in Wynnewood, and a developer of senior living facilities began to draw plans for the reuse of the campus as a mixed senior living and short-term medical care facility. The developer asked Main Line Health Care to join him in financing and constructing the facility. The parties opened discussions with the board of the seminary about purchasing portions of the campus, and the two presented a joint proposal that would pay $25 million to the seminary. In December 2015, instead of learning whether the board would accept this proposal, the developer was told that the seminarhttp://injury.findlaw.com/product-liability/car-defect-injury-claims.htmly and Main Line Medical were negotiating directly with each other and without him.

In spite of the fact that the developer and Main Line had never signed a formal agreement, the developer brought suit to block any sale to Main Line Health. The developer’s attorney argues that, under Pennsylvania’s real estate laws, Main Line’s joining in the presentation to the seminary constitutes the effective creation of a partnership or joint venture along with the developer. The existence of the entity prevents Main Line from negotiating any sale with the seminary in which the developer is not included. The case is currently pending in court, and Main Line has not issued any comment.

This case helps illustrate the importance of consulting an experienced real estate attorney before beginning negotiations about a real estate transaction of any significant size. A qualified attorney can offer advice, review documents, draft contracts and perform other functions that can help avoid or minimize expensive and time-consuming disputes later on.

Source: Philadelphia Inquirer, “Developer miffed at Main Line Health over St. Charles Seminary parcel,” Harold Brubaker, Jan. 27, 2016

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