Christian Osgood and a co-speaker explain how disagreements over operating agreements turn into expensive legal battles in multifamily deals. Miscommunication cascades into bigger problems, like struggling to lease units during Seattle's tough fall and winter seasons. Clear communication upfront prevents costly disputes.
How does that play out and how do you avoid scenario? Because sometimes you just get something ridiculous. It doesn't matter if you're right, by the way. If it goes legal, it's whoever wants to pay the most to be right is typically what happens on deals like that or other deals where people have disagreed with the operating agreement. When we've had disputes, what does that feel like and how do we avoid that today?
For me, it doesn't feel great at all because either it's some ball was dropped or somebody didn't understand what you were trying to communicate to them in the past, and then you have to go back and re-explain it, and then they might have more questions that cause bigger problems, it just turns into this cascading issue. In that example, it was, uh, the person was understanding what we were saying. It's like, hey, we're trying to get these units leased. It's greener Seattle area. It's kind of hard sometimes, especially on the type of the time of year. And that was our biggest problem is we were going into fall and winter, and those are the hardest times to lease up.
Very true. So you'd say a lot of it comes down to communication?