As we enter Phase II of the mock real estate transaction, negotiations are heating up! INEVITABLE, LLC, comprised of Brian Trujillo and Kayla Hernandez (a.k.a. supervillain Thanos), is trying its best to thwart STARK, LLC’s plan to save the world. But the STARK team, led by Franco Piccinini, Sophia Guzzo, and Jordan Rhodes, is working hard to see its plan come to fruition.
At the heart of the negotiation lies a vacant tract of land—15,000 square feet to be exact—in Miami’s very own Brickell neighborhood. The opportunity for STARK is truly a rare one (how many vacant pieces of land are really left in Brickell?), but financial incentive is not all that drives the STARK team. INEVITABLE has concocted an evil plan to own all six Infinity Stone properties. If INEVITABLE retains the property, then it will inch closer to fulfilling its evil plan. If STARK can close the deal, however, it will thwart INEVITABLE’s evil plan, gaining a valuable asset and saving the world at the same time.
Just a few weeks back, STARK and INEVITABLE entered into a letter of intent (“LOI”), a non-binding agreement that defines the purchase price, deposit value, inspection period, and closing period for the deal. Here, the parties also agreed to certain zoning restrictions because STARK will need to re-zone the property in order to close the deal. Following the signing of the LOI, Adam Lustig and Phillip Sosnow explained to the parties the art of negotiating a real estate contract. They stressed the importance of clearly defining the scope of the inspection period, which includes setting parameters for environmental testing, reviewing title and survey, and creating a technical team for development. They also spoke extensively about seller’s representations and warranties and other limits on liability.
After agreeing to the terms of the LOI, the parties returned to the negotiating table to hash out the specifics of the Purchase and Sale Agreement (“the contract”). Led by coaches Sara B. Herald and Manuel Gonzalez, the parties debated the terms of the contract, focusing their negotiations on four sections: Seller’s Representations, Default, Buyer’s and Seller’s Liability, and As Is Condition.
As the parties marched through each section of the contract, they jockeyed for the superior position, debating the inclusion and exclusion of even (seemingly minor) terms. At times, the negotiations grew tense, with each team taking several sidebars to hash out their respective strategies. INEVITABLE wanted to limit its liability by narrowing its representations and capping the amount of damages that STARK could pursue if the deal went sour. STARK, on the other hand, wanted to mitigate its risk by expanding INEVITABLE’s representations so that if the property contained a major environmental landmine, STARK could back out of the deal and be reimbursed its deposit and expenses incurred during the due diligence period. But in the end, both parties wanted to make the deal happen. STARK wanted the property. INEVITABLE wanted compensation. To reach their common goal, both parties had to give up some positions to gain others. After an hour and a half of negotiations, the parties finally agreed to the terms of the contract.
Next up, the parties will draft a new contract to reflect the terms of the negotiation. Then, they will sign the contract and move on to closing. It has been a fun ride so far! From negotiating the LOI to negotiating the terms of the contract, we have learned so much about the various aspects of a real estate transaction. The mock program has provided the summers with an opportunity to work on a transaction that many lawyers-in-training never get to do. We can’t wait for the next steps, and we’re excited to close the deal soon! Most importantly, a successful deal means that STARK will save the world once again!