Risk Management in Transactions
Virtually every transaction has some risk. But the risk in most transactions is so small that we usually don’t even think about it.
For example, buying a candy bar at a convenience store usually has very little risk. But no transaction is completely risk-free. Years ago I knew a person who bought a package of candy-covered chocolates at a small store. She put a handful in her mouth and broke a tooth. The machine that made the candies had malfunctioned and put a hard piece of solid candy into the bag along with the chocolates. Expecting only soft chocolates, this person bit down hard and broke a tooth.
While there may not be much risk in buying candy, there can be much more risk in buying real estate. Most real estate includes many systems which only work properly if they are correctly designed, constructed, and maintained. A failure to correctly design, build, or maintain real estate can result in problems, and many of the problems seen in real estate can be traced to one of these causes. In addition, there can be problems with title, easements, liens, and other issues concerning legal ownership or use of the property. Fortunately, many transactions go smoothly with no problems, surprises, or disappointments. But when things go wrong, the time, cost, and frustration of setting things right can be significant. The whole purpose of getting property inspections and professional advice before buying a property is to try to avoid surprise, expense and disappointment as much as possible.
After litigating for more than 30 years, Robert Jacobs now mediates challenging real estate, business, construction, personal injury, trust and probate cases. In 2020 he served as Chair of the Contra Costa County Bar Association ADR section and Co-Chair of the Alameda County Bar Association ADR section. Since 2017 he has served as one of the update authors for the CEB treatise Real Property Remedies and Damages and is a co-author of CEB Practitioner (Real Property). He holds an AV rating from Martindale-Hubbell and is a designated SuperLawyer. Mr. Jacobs received his mediator training from Northwestern University in Chicago, Illinois.