ETHICS ISSUES IN REAL PROPERTY DEVELOPMENT PROJECTS

Written by Dianne Jackson McLean^*

This article explores that many ethics issues that arise in business development transactions⁰¹ The issues will be explored in the context of a complex mixed financed affordable housing development. However, the ethical issues are applicable in most complex business transactions. The article is organized to provide a list of issues that should be considered as follows: (i) the initial inquiry; (ii) the transaction; (iii) the client, (iv) the engagement letter; (v) the conflict letter; (vi) the client files; (vi) the former client; and (vii) the on-going ethical obligations.

I. INTRODUCTION.

Business transactions can be extremely complex and are often developed and constructed in phases. This is especially true in the context of complex affordable housing developments that are generally financed with public and private funds, and subject to a host of governmental regulatory restrictions. Factors that can influence the transaction include the financing, market conditions, weather, natural resources, land conditions, locality, government agencies having jurisdiction over the project, the ownership structure of the seller and buyer, the lenders to the project, the community, and the objective of the project. These variables will have an impact on the ethical obligations of the attorneys involved. The California Rules of Professional Conduct (hereinafter "CRPC") require that an attorney be competent.⁰² Competency will be measured in the context of the complexity of the transaction. In this regard, it is crucial that an attorney determines the nature and scope of the transaction to establish if the attorney is able to provide competent representation to the client.