In today’s fast-moving real estate market, it may be tempting to rely on standardized “form” contracts to quickly move deals along. However, at Rieger Sadler Joyce LLC, we regularly see the hidden risks and consequences that come from using cookie-cutter forms in transactions that are anything but typical.
Form contracts may cover the basics, but they rarely address the unique factors that come into play in local real estate deals. Whether you're buying infill property in Midtown, leasing space in Edmond, rezoning in Newcastle, or developing land in Norman, a standard form contract often misses critical protections and detailed provisions that each unique transaction demands.
Take, for example, plat obligations—a common issue in many real estate transactions for both buyers and sellers. Standard forms often ignore the need to obtain approval from local municipalities and fail to address public improvement obligations to ensure the land is buildable, potentially leaving sellers or buyers exposed to unexpected costs, expenses, and delays.
Additionally, custom contracts allow parties to adequately address specifics, such as zoning contingencies, access to utilities in growing municipalities, or post-closing obligations in larger developments. In the current real estate market, complex development issues are becoming far more frequent. It is very common for parties to negotiate covenants, restrictions, cross-access and drainage easements, maintenance agreements, and similar instruments that will govern how the parties will deal with each other for many years after a deal is closed. It is a mistake to utilize form agreements to establish a long-term relationship, as the failure to detail the unique expectations, rights, obligations, and requirements of the parties at the initial stages of a transaction will lead to confusion, disputes, and potentially litigation.
Contracts that are tailored to the parties’ specific needs, expectations, and negotiated deal terms will provide clarity on obligations, cost sharing, timelines, and remedies in the event of a dispute. Custom contract drafting can ensure that both parties to a transaction understand the key issues and closing requirements at the beginning of a deal, which reduces the risk of disputes arising at the closing table or in the years that follow.
A customized contract is not just a legal form that is required to commence a transaction; it’s a negotiation tool and risk-management strategy. Investing in a well-drafted agreement at the initial stage of a transaction will save time, money, and stress in the long run.
Written by: Gunner B. Joyce | Partner
