Business security

Practice Note: How to handle real estate compliance risks

In the prior post, we talked about anti-corruption enforcement actions and investigations involving real estate. Now let's look at real estate-related compliance.

A strong compliance program can help an investor detect and avoid a high-risk transaction, or at a minimum ensure that the investor avoids liability for conduct of a rogue third party.

Two examples we’ve seen in practice are described below: 

• During the due diligence process, a global real estate investor learned that a proposed property manager in India expedited the environmental approval process for a different property by paying small amounts of cash to local government officials.  By identifying the situation prior to engagement, the investor was able to proceed with the acquisition but engaged a different property manager.