Even in a "typical" workday, real estate developers have no shortage of responsibilities to fulfill. From researching investment opportunities and acquiring new properties to overseeing development projects, these professionals are critical to the success of commercial and residential real estate endeavors.
Despite their many duties, however, one that cannot be overlooked is the need to comply with the latest legal requirements and regulations. By understanding some of the most common legal risks in real estate development, as well as how to mitigate them in individual projects, professionals in law-adjacent real estate roles are better equipped to avoid legal issues, protect their investments, and pursue long-term success.
An In-Depth Look at Legal Risks in Real Estate Development
No matter the size or scope of the project, real estate developers may face any number of legal obstacles in their everyday work. The key is to be aware of the most common legal challenges and how to overcome them while keeping regulatory compliance at the forefront.
Common Legal Challenges Faced by Developers
Throughout every stage of a project, real estate developers must remain in compliance with a variety of compliance regulations. Some examples of these include:
- Zoning and land use laws, which can vary greatly from place to place. Specifically, properties should be properly zoned for the type of development desired (residential, commercial, industrial, etc.). Failure to comply with zoning and land use laws could result in the derailment of entire projects.
- Financing requirements, particularly regarding securing financing for property acquisition, development, and construction. Investors must adhere to strict securities regulations, especially when undertaking large-scale commercial development projects.
- Building and safety codes, including both local and federal safety requirements for workers. Non-compliance with these codes could mean legal trouble, fines, and major project setbacks.
- Environmental laws, namely those related to waste management and water usage on construction and development projects. In addition to complying with relevant laws, developers may also need to obtain specific permits and/or conduct environmental impact studies for larger projects.
Aside from these common legal challenges, real estate developers should be prepared for potential disputes on any given project. Contract disputes, negotiations, and title disputes can lead to substantial setbacks for those who fail to do their due diligence before breaking ground.
The Impact of Regulatory Compliance on Projects
Real estate development laws and relevant compliance regulations can have a considerable impact on the overall success and timeline of a project. When real estate development professionals thoroughly understand these laws and how to remain in compliance, they are better positioned to keep their projects on schedule and on budget.
Likewise, real estate development teams that consistently adhere to relevant laws and regulations can build a strong reputation for integrity and trustworthiness. Over time, this can bring about better business and public perception.
On the other hand, when real estate developers disregard compliance, this may yield reputational damage that can be difficult to recover from. In many cases, non-compliance can also lead to hefty fines, penalties, and legal troubles (such as lawsuits) that can result in major project setbacks or even non-completion.
The Role of an M.L.S. Degree in Mitigating Legal Risks
For those in real estate development, a full-fledged law degree (such as a Juris Doctor) may not be necessary. That’s why a Master of Legal Studies (M.L.S.) is specifically designed for professionals in law-adjacent roles to learn the intricacies of mitigating legal risks and following industry compliance regulations.
So, what can you gain from an M.L.S. degree program if you work in real estate development?
Specialized Knowledge Gained from M.L.S. Programs
Completing an M.L.S. degree program can be an ideal way for real estate professionals to hone a deeper understanding of the numerous legal requirements and regulations across the industry. With coursework covering topics ranging from zoning laws and contract negotiations to environmental regulations and more, students can build the foundational knowledge and skills needed to navigate even the most complex of real estate development challenges.
Additionally, an M.L.S. program can provide real estate professionals with the opportunity to learn essential risk management skills — empowering them to effectively pinpoint and mitigate everyday risks associated with development, construction, property management, and more.
All of this, combined with a focus on developing soft skills (like ethical decision-making, communication, and creative problem-solving), can prepare real estate professionals for the unique challenges of real estate development.
How M.L.S. Graduates Apply Legal Principles in Development
With a solid background in real estate law and compliance standards, law-adjacent real estate professionals can apply what they have learned in their everyday work. In securing financing for a new acquisition, for example, these professionals can mitigate legal risk by following the latest real estate financing regulations. In considering a new project for purchase, these same professionals may leverage their risk-mitigation skills to do their due diligence and better understand the potential risks associated with a new project.
Key Legal Areas for M.L.S. Graduates in Real Estate
Along with the applications of legal principles covered above, there are two core areas of real estate development where M.L.S. graduates can excel: zoning/land use and contract negotiation/drafting. Both play a pivotal part in any real estate development project, in terms of both compliance and long-term success.
What Are Zoning Laws and Land Use Regulations?
Real estate development professionals should possess an in-depth understanding of zoning and land use laws to avoid potential legal pitfalls and long-term project delays.
What are zoning laws, exactly? These laws are in place (often at the local and county levels) to specify how particular parcels of land may be developed. Some are only permitted for residential development, whereas others may be zoned for industrial or commercial use. Either way, real estate developers need to understand how different zoning and land use regulations can impact project plans — especially as they relate to factors like building height, design, parking, and required permits.
In an M.L.S. program, students can explore coursework in relevant topics that cover planning and zoning regulation, housing law, and similar areas to prepare for this type of work.
Contract Negotiation and Drafting
As land is acquired and contractors are secured for development, having the right contracts in place is crucial for legal protection. Real estate developers, then, need a robust understanding of the different components of a real estate contract — as well as how to handle the negotiation process fairly and confidently.
Carefully crafted real estate contracts not only ensure that a developer's best interests are protected but also that legal risks are mitigated and all involved parties are on the same page. An M.L.S. degree program should cover applicable topics such as contract administration and drafting.
Navigating Environmental Laws and Permitting
Finally, real estate developers also need to have a strong knowledge of current environmental laws and permitting requirements to maintain compliance and avoid legal issues in their work. Because these laws are continuously changing and evolving, these professionals must be committed to a lifetime of continuous learning and growth.
Addressing Environmental Impact Assessments
Today, many larger real estate development projects require environmental impact assessments to be conducted. These assessments must follow specific rules and regulations — helping investors, developers, and other stakeholders better understand the environmental effects of a project before it begins. With the knowledge of environmental regulations and assessment requirements covered in an M.L.S. program, professionals can be prepared to order and complete assessments as needed.
Securing Necessary Permits and Approvals
Real estate development projects may also require special permits or other approvals from local or state governments. These might entail environmental permits for provisions like waste management and water use, along with site plan approval permits for some projects. The curriculum of an M.L.S. program that specifically covers the real estate industry will include coursework on these types of permits and approvals, preparing graduates to handle these responsibilities with confidence.
Discover More in an Online M.L.S. Program
The world of real estate law can be highly complex — but remaining compliant is a critical part of mitigating risks in real estate development. For professionals in law-adjacent real estate careers, a Master of Legal Studies can provide the foundation needed to better understand and navigate relevant laws and regulations.
If you're seeking an M.L.S. program that suits your needs, the online Master of Legal Studies through the University of Miami School of Law may be ideal for you. Offered in a convenient 100% online format, this degree program is designed with busy professionals in mind. Plus, with its available Real Estate and Construction Law and Regulation track, you can explore dedicated coursework in relevant topics such as legal research and writing, analysis, corporate compliance, enterprise risk management, and more.
Learn more about our online M.L.S. program, or begin your online application for admission today.
Sources
- https://admissions.law.miami.edu/academics/mls/
- https://admissions.law.miami.edu/academics/mls/curriculum/#real-estate
- https://news.miami.edu/law/stories/2024/12/stregthening-contract-negotiation-skills-with-an-mls-degree.html
- https://news.miami.edu/law/stories/2025/03/how-an-mls-degree-helps-you-navigate-legal-issues-in-commercial-real-estate.html
- https://news.miami.edu/law/stories/2024/12/stregthening-contract-negotiation-skills-with-an-mls-degree.html
- https://www.zoningatlas.org/
- https://www.sciencedirect.com/science/article/pii/S0959652624033353
- https://www.researchgate.net/publication/235296543_Environmental_regulations_and_the_real_estate_industry
- https://www.jstor.org/stable/26999942
- https://www.nar.realtor/zoning
