Sean O’Leary is a senior partner of Providence-based O’Leary Law Associates. In his career, he’s represented retired state workers and public schoolteachers, served as legal counsel for domestic and foreign corporations, and represented real estate developers. A licensed title insurance producer and real estate broker, he also regularly represents buyers and sellers of residential real estate. He is a graduate of Boston College and Roger Williams University Law School. He spoke recently with the Providence Business News.
PBN: What made you interested in specializing in real estate law?
O’LEARY: Our firm, O’Leary Law Associates, was founded nearly 40 years ago. A main staple of our firm has invariably been representation of owners, developers, managers, and buyers and sellers of real estate. So, I was extremely fortunate to be introduced to real estate law at a young age. In Rhode Island and beyond, the owners and managers of apartment communities, commercial and residential developers, as well as buyers and sellers of single-family homes are all invaluable cogs in our economy. I genuinely think of our helping all these parties navigate the legal landscape as our important, albeit humble, contribution to the local economy.
PBN: You now represent clients in purchasing, or sale, of large apartment complexes and commercial buildings. What are some of the unique concerns of these transactions?
O’LEARY: The major areas of concern in multifamily/commercial purchases include thorough due diligence on the part of the buyer and inspectors, ensuring clear and marketable title to the property, and satisfaction of lender conditions. Larger transactions may involve more-complex ownership structures, sometimes with multiple investors and/or limited partners. Bigger physical plants also typically involve more-intensive inspections. Purchases of multifamily project-based, subsidized properties add an extra layer of regulations due to the mortgages oftentimes being insured by the U.S. Department of Housing and Urban Development and the owners’ receipt of federal subsidies.
From a financial standpoint, there is generally more at stake in larger multifamily/commercial transactions. By the same token, a well-drafted purchase agreement will properly shift the parties’ respective liabilities and responsibilities. The purchase agreement also ought to provide the buyer with ample opportunity for comprehensive due diligence, as well as warranties and representations, especially from the seller to the buyer. Ultimately, the buyer’s counsel can give a satisfactory opinion letter to the buyer’s lender and obtain title insurance policies for the benefit of the lender and the buyer.
PBN: What makes a commercial property, such as a residential apartment site, a good investment? What should buyers be looking for?
O’LEARY: It is fair to say, from an investment perspective, that not all properties are created equal. However, a well-constructed and maintained property with a solid tenant base can provide an investor with a healthy, reliable, long-term return on its investment. The model investor is typically and smartly educated as to the market values, and pricing trends and infrastructure development in the area. Also, a pure investor should be predominantly guided by the finances of the prospective purchase, including short- and long-term rental revenue, need for capital expenditures, expenses — including delineation of immutable, negotiable and/or preventable expenses — net operating income and capitalization rate, among others.
PBN: Have state and local review of development proposals become an obstacle to economic development?
O’LEARY: It is probably not going too far out on a limb to say that complaining about government has almost been elevated to a major sport in Rhode Island! However, having spent about a decade of my career in New York, I also do not think that local and state government is any more an obstacle here as it is in and around New York. We focus the lion’s share of our efforts in Kent and Providence counties. Many of the local planning and zoning boards in these areas are comprised of hardworking folks, infused with the value of economic development, together with those boards’ avowed purposes. While we likely experience other economic challenges in our communities, such review and rules would not, in my opinion, rank chief among them.
PBN: You are an adjunct professor of business law at Bryant University, according to your online bio. What sorts of topics do you cover in your classes?
O’LEARY: I have been really fortunate to have taught business law to Bryant students. Our syllabus has always been ambitious, trying to expose students with business-related majors to many of the issues that they may confront in the business world. Among many others, we would discuss the importance and formation of contracts, agency and employment law, formation of maintaining corporate entities, negligence and other torts, as well as intellectual property. One of the more-enjoyable aspects, and perhaps valuable teaching tools of the class, would be applying the legal concepts to various real-life hypotheticals, often posed by the students. We would invariably review court decisions and engage in a moot-court exercise, where students would have an opportunity to argue differing sides of the cases.