Real Estate Tip – Permitting: A $48m Lesson on the Importance of Notifying All Neighbors

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In a recent Missouri case, a landlord lost a very significant commercial tenant and a title search company lost $48 million because of an incomplete permitting process. The tenant sued the title search company for failing to identify all of the neighbors who should have been notified of the permit applications. As a result, the permits were invalid and the tenant built its facility in another state. A jury agreed with the tenant that the title searcher should pay for its lost profits, higher construction costs and increased costs of raw materials at the second location.  

This is an extreme case that teaches us not to take shortcuts. When landlords or tenants are seeking land-use approvals, be sure to notify everyone – abuttors, neighbors and anyone else who could be affected. 

Today’s real estate tip is brought to you by Rick Smith, a LEED Accredited Professional and member of Bernstein Shur’s Real Estate Practice Group and Green Building Team. Stay tuned for more useful tips for real estate professionals.

For more information on land use approvals, contact Rick at rsmith@bernsteinshur.com or 603 623-8700 ext. 8829 or 207 774-1200.