As a business owner, taking the step to purchase real estate for your company is potentially massive, and can come with many benefits. However, if you are not careful, it can also come with serious legal issues that you may need to deal with for years to come. Here are five potential complications that can arise in commercial real estate transactions:
- Title defects
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- Even before you finalize a real estate contract, it is common to perform a title search on a property to ensure it is free of title defects. This is important because, with few exceptions, a property must have “clear title” and be free of defects to be legally sold. These defects may include issues like an outstanding mortgage or lien, undisclosed easements or covenants, or disputes over the property’s boundaries.
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- Contract disputes
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- Real estate contracts can be complicated at the best of times, and commercial real estate contracts can be especially complex, depending on the nature of your business. These complex terms can easily give rise to contract disputes, where both sides argue about what the terms of the contract require or what protections it can offer. If these disputes are not handled appropriately during negotiations, they can lead to a lawsuit later on.
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- Financing issues
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- Broadly speaking, anyone who might want to purchase commercial real estate will probably need to seek a mortgage to purchase it. This usually comes with a requirement to obtain pre-approval on financing before the transaction can go forward. If the buyer is unable to get approval for a mortgage, or if financing falls through before the transaction can be completed, it can give rise to serious problems.
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- Construction disputes
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- It is extremely rare for a business to use a purchased property exactly as they bought it, which means potentially expensive renovations and repairs. This, in turn, can lead to serious legal issues if there is any dispute over the construction contract. Additionally, there may be unforeseen issues with permitting and other legal requirements if you are not careful.
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- Zoning and land use problems
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- Anyone looking to purchase commercial real estate will almost certainly need to deal with zoning and land use laws on some level. These laws dictate what sorts of businesses can be built, and could impose serious burdens on your ability to run your company. That is why you should make sure to hire a real estate lawyer to identify these problems, ensuring they do not turn your otherwise fantastic purchase into a potentially unusable property.
For more than 50 years, the New York lawyers at Elovich and Adell have represented clients like you in real estate cases. Our attorneys, conveniently located in Long Beach, handle personal injury, real estate, commercial transactions, criminal defense, and labor and employment claims all across New York State. For a consultation, please call us at 516-432-6263 or visit our contact page for more information.
