Legal Issues In Commercial Real Estate Transactions


Compared to the residential real estate transactions, commercial real estate investment involves far larger sums of money, as well as higher risks when investing or purchasing. Far more aspects require analyzing and solid estimation to gain lucrative transaction. With a lot at stake and many issues that might arise during the procedure, it’s a wise strategic move to hire an experienced lawyer to handle the commercial real estate transaction on behalf of you or at least to monitor the process. Here’s a list of some common legal issues occurring in this procedure.

Adequate valuation of the property

Real-estate-and-lawA myriad of factors determines the accurate value of a given real estate. The true value varies depending on the size and condition of the building, location, quality of the interior, age and use and traffic connections. You have to know all these aspects and how to calculate the accurate overall value, whether you are selling, renting or purchasing the real estate. To make a wise and lucrative investment, the best is to hire an attorney, have him inspect the real estate and offer you the estimation of the current market value before you make any definite transaction.

Estimating financial risk

The actual value of the real estates is under the strong influence of the general economy and market fluctuations. There are sometimes obvious periods when trading real estates is not a wise investment. Also, renting a real estate ties up certain liquid assets for some time which can cause significant financial problems if you end up struggling with collecting rents. These are all risks on a long run, and you can never predict them precisely, but the expert’s eye and evaluation can certainly help you come up with the best predictions and wise investment.

Have a lawyer to conduct a due diligence

Real-estate-law1The trust and respect of the fair play are welcome, but when it comes to doing serious business, every reasonable person will investigate the other part prior signing any contract. It goes both to real estate and to a person renting it selling it or purchasing it. It is just another aspect of the transaction that a professional with the experience should handle. When it comes to real estates, one of the best examples when due diligence is a crucial method is to check up if a given real estate possesses all required licenses, adjusted zoning for the property and adequate installations.

Attorneys are experts for negotiation

Another aspect of commercial real estate trading that is better if handled by a hired professional is the mere process of negotiation. An attorney specialized in this field of law and legislation are educated and experienced enough to know how to gain the best trade on behalf of you. They usually know plenty of useful tricks and strategic combinations that lead to the lucrative cost-benefit effect.

Finally, always have your chosen lawyer to check the assumption of liability of the real estate. Do the legal issues properly and won’t have further issues with law.


Simon Hamilton