USA – LOUISIANA Law and Practice Contributed by: Jeffrey P. Good, Susan M. Tyler, B. Trevor Wilson and Parker Hufft, Jones Walker LLP
tions or appropriate evidence of authority should be attached to the act of sale or separately recorded. 2.3 Effecting Lawful and Proper Transfer of Title As between the parties, the transfer of ownership takes place immediately upon the execution and delivery of the act of sale. To be effective against third persons, the act of sale must be recorded in the conveyance records of the parish (the Louisiana equivalent of a county) in which the immovable is located. It is common in all commercial real estate transactions for the buyer to obtain an owner’s policy of title insur - ance. Louisiana is a “fixed rate” state, which means that premiums for title insurance are submitted for and approved by the Louisiana Department of Insurance. Agents are prohibited from modifying such rates or rebating insurance premiums. 2.4 Real Estate Due Diligence For commercial transactions, buyers are usually afforded a due diligence period under the purchase agreement, and typically obtain a Phase I environ - mental report, an American Land Title Association/ National Society of Professional Surveyors (ALTA/ NSPS) survey and a commitment for title insurance. Unless there are unique circumstances, the buyer’s lawyer will typically obtain the survey and title com - mitment at the buyer’s expense. Additional diligence may be necessary – for example, if the Phase I envi - ronmental report indicates a potential site condition such as a recognised environmental condition (REC). Zoning diligence and real estate appraisal are also completed during the due diligence period. Increasingly, buyers are conducting property resil - ience assessments to evaluate climate-related risks, particularly for properties in coastal areas or flood zones, and reviews of digital infrastructure capabili - ties, reflecting the growing importance of technology in commercial properties. 2.5 Typical Representations and Warranties Unless there are unique circumstances, most com - mercial properties are sold with limited representa - tions or expressed or implied warranties, other than
the typical authorisation representations of selling entities. As a default rule, Louisiana law provides that the seller warrants title to the property. Lawyers representing a seller will often negotiate a more limited warranty of title so that the seller provides either a warranty against their own acts (referred to as a special war - ranty deed in other states) or no warranty of title what - soever. In such circumstances, the buyer will rely on a policy of title insurance in lieu of a seller’s limited warranty. Regarding the condition of the property, Louisiana law provides that the seller warrants the buyer against “redhibitory” defects or vices, which, generally, are defects that render the thing useless or inconvenient (or diminish the property’s usefulness) such that prior knowledge would presume “that a buyer would not have bought the thing”. Depending on the defect, the buyer may have the right to rescind the sale or obtain a price reduction. Defects known to the buyer (or which should have been discovered through inspec - tion by a “reasonably prudent buyer”) are not covered. Almost all commercial sales include a waiver of such warranty of condition. 2.6 Important Areas of Law for Investors A foreign investor must consider federal, state and local income, franchise, sales/use, property and occu - pational licence taxes when acquiring real estate in Louisiana. Special considerations must also be made in relation to foreign notaries. Critical areas to understand include Louisiana’s civil law system, which differs significantly from common law jurisdictions throughout most of the United States, the state’s property tax structure and environmental regulations given Louisiana’s coastal location and industrial history. For coastal properties, investors should understand the coastal zone management
programme and wetlands regulations. 2.7 Soil Pollution or Environmental Contamination
Provided that a purchaser obtains a “clean” Phase I environmental site assessment where no RECs are found to exist, and that such assessment is compliant
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