Buying, selling, or leasing commercial property involves far more legal work than most business owners anticipate. A single oversight in a purchase agreement or lease can cost hundreds of thousands of dollars. Environmental issues, zoning restrictions, title defects, and financing contingencies all require careful legal review before you commit to a transaction.
Commercial real estate deals move quickly once negotiations begin. Sellers want to close fast, and buyers face pressure to lock in favorable terms. Our friends at Sahyers Firm LLC discuss how rushed transactions often lead to problems that could have been prevented with proper legal guidance. A commercial real estate lawyer reviews documents, conducts due diligence, and protects your interests throughout the transaction process.
Purchase And Sale Transactions
Acquiring commercial property represents a major investment. The purchase agreement sets forth the terms of the sale, including price, closing date, contingencies, and what happens if either party backs out. These agreements need careful drafting because standard forms rarely address all the issues specific to your transaction.
Due diligence investigations uncover problems before you’re legally obligated to complete the purchase. We review title reports, survey documents, environmental assessments, and property condition reports. Liens, easements, or restrictions on the property may affect how you can use it or reduce its value.
Title insurance protects against defects in ownership that weren’t discovered during the title search. We review title commitments to identify potential problems and negotiate with the title company about coverage exceptions.
Commercial Lease Agreements
Lease terms for commercial property differ significantly from residential leases. The stakes are higher, and the law provides fewer protections for business tenants. Landlords typically present lengthy lease agreements drafted to favor their interests.
Key lease provisions include:
- Base rent and operating expense obligations
- Permitted uses and exclusive use clauses
- Maintenance and repair responsibilities
- Options to renew or expand
- Assignment and subletting rights
- Default provisions and remedies
Lease negotiations involve more than just the rental rate. We examine every provision to identify unfavorable terms and negotiate changes that protect your business. Understanding who pays for what expenses matters tremendously over a multi-year lease term.
Zoning And Land Use Matters
Zoning ordinances control how property can be used and what structures can be built. Before purchasing property or signing a lease, you need to verify that your intended use complies with local zoning regulations. Assuming the property is zoned correctly without verification can lead to expensive surprises.
Sometimes the best property for your business doesn’t permit your intended use under current zoning. We can pursue variances, conditional use permits, or rezoning applications to allow your planned use. These processes involve public hearings and applications to local government bodies.
Development And Construction Projects
Developing commercial property requires coordination between multiple parties. Attorneys draft and review construction contracts, architect agreements, and contractor bonds. These documents allocate risk between the owner, general contractor, and subcontractors.
Mechanic’s liens pose a significant risk in construction projects. Contractors and suppliers who don’t get paid can file liens against the property, even if you paid the general contractor. Proper lien waivers and payment monitoring protect property owners from these claims.
Financing And Loan Documentation
Most commercial real estate purchases involve financing. Lenders require extensive documentation including promissory notes, mortgages or deeds of trust, and personal guarantees. These documents give lenders significant rights if you default on the loan.
We review loan documents before you sign them to identify problematic terms. Some lenders include provisions that let them accelerate the loan or increase interest rates based on subjective determinations. Understanding what triggers default and what remedies the lender has matters greatly if your business faces financial difficulties later.
Environmental Concerns
Environmental contamination creates enormous liability for property owners. Federal and state environmental laws can hold current owners responsible for cleanup costs, even if the contamination occurred before they bought the property. Environmental assessments identify potential contamination before purchase.
Phase I environmental assessments review historical uses of the property and identify red flags. If concerns arise, Phase II assessments involve soil and groundwater testing. We help negotiate who bears responsibility for remediation when contamination is discovered.
Title Issues And Property Disputes
Clear title is essential for any commercial real estate transaction. We review title reports and surveys to identify potential problems such as easements, encroachments, or ownership disputes. Boundary disputes with adjacent property owners need resolution before closing.
Resolving title defects may require quiet title actions, negotiations with easement holders, or obtaining releases from lien holders. These issues can delay closing but must be addressed to protect your investment.
Protecting Your Real Estate Investment
Commercial property represents a substantial commitment of capital and often plays a central role in your business operations. The legal aspects of acquisition, financing, and leasing require attention to detail and knowledge of real estate law. Whether you’re buying your first commercial property, negotiating a long-term lease, or developing a new project, having proper legal representation protects your investment and helps avoid costly mistakes. Reach out to discuss your commercial real estate needs and how we can guide you through the transaction process.