Yesterday’s post about the proposed “renovation” of the Kennedy Center which will in fact be a demolition reminded me of a parallel instance in my law practice.

In order to encourage the renovation of historic buildings into affordable, government subsidized housing, Congress had passed a law providing for accelerated  depreciation for eligible properties (in other words, if an investor owned a share in such a property, the investor could take depreciation losses sooner than normal, and would therefore pay a premium to the developer). Again to simplify, financing for the redevelopment of these properties would come from a combination of government assistance, loan proceeds, and payments from equity investors. Both the buildings and the renovation work had to qualify under federal rules. The renovation requirement included preservation of a certain portion of the historic exterior walls.

The project involved a series of historic rowhouses in Baltimore. We represented the equity investors. I was in Baltimore for other reasons, and decided to drive by the property.

I always liked to see properties I was involved with, and was always surprised that most lawyers who had my type of practice did not feel the need to. They would rely on what they were told by their clients or others.

In this situation, my clients themselves were not monitoring construction. They were relying on the developers doing what they should.

I drove by the property, expecting to see a gutted property with external walls still standing, but what I saw was a block of vacant lots. Nothing at all was standing on the lots except for two or three mountains of bricks piled at one end. I was dumbfounded.

The developer’s position was that he was going to be in compliance because the new external walls were going to be built using many of the old original bricks. But that was not the position of the tax laws, so the deal had to be called off. No one was very happy with me, but everyone did understand. The Baltimore rowhouses, like the Kennedy Center, was being demolished, not renovated.

I never understood a lawyer not visiting properties to ensure legal and contractual compliance before a closing, although again, doing so did not seem to be the norm.

And I remember other instances, as well. A client who was buying two development lots from a city. There was a street bisecting the lots which was to be abandoned by the city and closed. The city took the appropriate legal action, but when I went to look at the site the morning of the closing, the street had not been closed, and traffic was passing over what was in a few hours to be my client’s property. All we needed was an accident or something. Who would bear the responsibility? I made certain the road was barricaded before the closing.

In another city, there was an old hotel which had been closed and was now to be renovated as affordable senior housing. My client was the developer, and he lived in a different state, far from the property. There was a closing set at the office of the State Housing Finance Agency, that was providing the financing. I flew into town the night before the closing. I went to look at the property in my rental car. On the ground floor of the former hotel, a pharmacy and a florist were still operating. What? I hadn’t been given any leases to review. None of the draft documents I had seen mentioned businesses operating on site. My client thought the businesses had closed, and the seller (basically a dormant company) and the lender (believe it or not) seemed to have no clue. Needless to say, there was no closing that day.

But I must say, with these and more experiences like these, and knowing most lawyers did not go to look at properties, I wondered why I didn’t hear about problems like these all the time. I still wonder. I don’t understand.

Fake news does not always originate in right wing media. Or in any media.