Commercial Real Property Issues
While many of the concepts are the same, there can be huge differences between commercial and residential real estate. Commercial real estate transactions can be far more diverse and wide-ranging than residential sales. There may be greater concerns about hazardous materials or zoning issues. Concerns about Landlord/Tenant issues and there will always be questions about the suitability of the property’s location for your business needs. Furthermore, in many instances, you aren’t afforded the same consumer protections on a commercial real estate deal that may be available when you purchase a residence. Rresidential homebuyers are given greater protections against abusive lending practices than are business owners. Likewise, there are mandatory disclosures required in residential real estate matter that may or may not be required in a commercial transaction. As you navigate the complexities of commercial real estate, it is vital that you have at your side a firm with the insight and experience needed to protect your financial interests. With the involvement of lenders, landlords, tenants, developers, buyers and sellers, it is important that your representation has the insight necessary to oversee the entire process and anticipate any potential obstacles. We work closely with clients in drafting and reviewing contract terms and conditions, leases, financial arrangements, easements and restrictions, loan provisions, liability clauses and other issues in commercial real estate transactions.
We often hear the question, why do I need an attorney if I am buying Title Insurance? Title insurance is nothing more than an insurance policy that provides assurance to interested parties that there’s good and marketable title to the property being insured. However, this never means that title insurance guarantees perfect title. As with all insurance, there are a number of different types of policies and endorsements. There are also many exceptions to title, which all tie back into information in the preliminary title report. These include specific exceptions listed on the property to be insured, as well as standard exceptions. An attorney will review the title report with you and discuss any exceptions listed. One standard exception, for example, is that the insurance will only be provided for exceptions to title that are reflected by the public records. Unless a special endorsement is obtained (which costs more money), there’s no obligation on the insurance company to insure against defects in title that would have been apparent from surveying or otherwise physically inspecting the property.
Commercial Real Estate Transactions in Florida
We can never recommend that a person or company purchase any commercial real estate in the state of Florida without first consulting with a real estate attorney. If it is true that in the purchase of real property there are substantial rewards for the investor, it is also true that it has substantial risks. It is important to confirm that the zoning really is what it is said to be and this is equally important, that the zoning is in line with the city’s or county’s or state’s comprehensive growth plans.
If you are purchasing a commercial building, you need to know the status of both the zoning and the comprehensive plan in the event the property is destroyed by fire or other hazard, such as a hurricane. Can you rebuild it? Do you have to comply with new and more restrictive building or land use codes? Are there hazardous substances underneath the ground or underneath neighboring lands that can seriously impact on the ability to develop or re-develop the property? Perhaps, you wish to purchase existing rental properties and convert them into a condominium or a homeowners association (there are differences).
Will the zoning and comprehensive plan allow that? What steps have to be taken in order to formulate the plans you might have for converting to condominium or homeowners association ownership? Is it economically feasible to do what has to be done? Are there asset protection methods of holding title to the property? All of these and much more should be examined and the best way to start is to retain an experienced real estate attorney who can look into many of the issues and can direct you to where to find those answers that he is not able to handle for you.