What To Do When A Commercial Real Estate Deal Falls Through

Posted April 10, 2025 in Uncategorized

You’ve worked hard to put your deal together; if you’re like a lot of commercial property developers or investors, you may have taken a year or more to create the best terms for yoru transaction, only to see someone pull out of it, funding drop or an issue like a title dispute or zoning regulation derail all your hard efforts. Don’t just chalk up a failed deal to bad luck. You may have legal options to protect your investment or even make the deal go through with a little investigation and hard work from our Littleton, CO real estate litigation lawyer.

Assess the Reason for the Deal’s Collapse

Why did the deal fail? We can’t take any action until we know the reasons that the deal fell apart. It’s usually one of the following:

• Financing problems, like failure to secure adequate financing due to lender requirements, credit issues, or unfavorable market conditions
• Issues with due diligence, including problems with securing the right environmental assessments, a spotty title, or other problems that may make the property financially unavailable now or a less-desirable investment.
• Failure to resolve any outstanding liens, including construction liens, on the property.
• Zoning issues or legal hurdles. If zoning regulations change, if your permit is denied when you thought it would be approved, or if one party is non-compliant with local regulations, then your proposed development may have an issue.

A breach of contract is one reason a deal can fall through, but it’s also one that our attorneys can readily help you with. If you suffered fiscal losses due to the breach, including failing to secure the deal, then we can file a suit for damages to recoup as much of your losses as possible.

One thing that our Littleton commercial real estate lawyers cannot fix for you, unfortunately, is a deal that failed due to market conditions. Rising interest rates, an economic downturn or recession that halts commercial real estate development across the board, or even a change in an investor’s business strategy, could cause a party to reconsider the transaction.

Review the Contract for Remedies

A bad contract isn’t enforceable and could leave you twisting in the wind. Many contracts contain provisions to address any financial fallout from a failed commercial business deal.

Our Littleton commercial real estate litigation lawyers draft contracts with contingencies to protect your investment (and deal). We include:

• A requirement for an earnest money deposit. If the buyer backs out without a valid contingency, then you may be entitled to keep the earnest money deposit as liquidated damages
• Default or breach provisions that delineate the options for one party to sue for damages if the other party breaches. Or, these may require arbitration or another alternative dispute resolution method

Our attorneys may also include “escape clauses,” which are contingencies related to financing, inspections, or regulatory approvals. If one party fails to meet these conditions, the other is permitted to walk away from the deal without legal or financial penalties.

Contact Our Firm Today

One small issue could derail a complex commercial real estate deal that you’ve spent months building. Volpe Law LLC is here to help you fix it. Contact our Littleton commercial real estate litigation lawyer today.