Commercial property, also known as commercial real estate, refers to real estate which is owned or used by a business entity. Commercial property is often different from residential property in many aspects, including:

  • Design;
  • Function;
  • Layout; and
  • Aesthetics.

The majority of state laws have very specific laws which govern commercial property. These laws are separate and distinct from residential property laws.

For example, commercial property typically has different insurance rules than residential property. In addition, commercial property may be associated with different allowable conduct than that of residential property. Certain conduct may be permitted only in residential areas, while certain conduct is only allowed in commercially zoned areas, such as business activities.

Commercial property is typically subject to commercial zoning laws. Commercially zoned areas as usually reserved for businesses, which may include:

  • Restaurants;
  • Hotels;
  • Offices; and
  • Shopping centers.

It is important to note that these laws have their own limitations for businesses. For example, in most cases, a business owner is not permitted to live or sleep on the business premises.

What are Some Commercial Property Legal Issues?

Because of the unique issues in commercial property laws, commercial properties are often associated with distinct legal issues, which may involve:

  • Zoning and land use. Commercial activities are typically only permitted in commercial zones on commercial property;
  • Property taxes. These taxes can sometimes be higher than residential property taxes. They may also be different according to the type of business in place on the property;
  • Insurance. Commercial property insurance disputes are legal issues for many different types of businesses;
  • Ownership disputes. Many businesses deal with ownership, title, and leasing disputes over commercial property; and
  • Boundary disputes. There may be disputes regarding the physical boundaries of a commercial property. There may also be issues if the property is protruding onto another neighboring zone.

Additionally, commercial properties may encounter legal issues during the sale and purchase of commercial buildings. These types of disputes may involve contractual breaches, business-related disputes, and issues regarding the usage of the property.

Commercial property legal issues may often involve large volumes of documentation and paperwork. This is because of the nature of commercial property, which is often tied in with business usage and business contracts.

Therefore, if an individual has an issue or dispute regarding commercial property, they should do their best to collect any documents or forms which are related to the property. They may also want to do some background research regarding business, real estate, and property laws in the area, as laws can be different from each region to the next.

What is a Commercial Property Sale?

A commercial property sale involves the sale and transfer of property which is to be used for business purposes rather than for residential purposes. Transactions involving commercial property are often major transactions which involve properties that are worth large amounts of money.

In certain cases, enture lots or multiple buildings may be involved in a commercial property sale. In other cases, commercial property sales may involve a small building or a residential building which will be converted for business use.

The competition for commercial real estate is often greater than that for residential property. This is due to the fact that businesses often compete for the best locations possible for their businesses. In addition, commercial properties are typically subject to more stringent regulations than residential properties.

What Should I Know about Buying Commercial Property?

If an individual has decided to purchase commercial real estate, there are several factors they should include in their offer which may affect their possession and title to the piece of commercial real estate. These include:

  • Material defects within the seller’s knowledge. Many states require a seller who is aware of a problem with the commercial property that may influence the decision to purchase to disclose the presence of this problem to the potential buyer;
  • Actively concealing material defects. Generally, a seller cannot actively hide a defect in order to get the buyer to purchase the property;
  • Buyer’s duty to inspect. Before a buyer purchases commercial real estate, they should hire a professional to inspect the property for any defects that are not easily noticeable. Generally, a seller will not be held liable for problems with the property that they did not know about and did not actively conceal;
  • Encumbrances. An encumbrance is something that may burden the buyer’s rights as an owner of the commercial property; and
  • Other potential environmental and zoning problems.

What are Some Legal Issues Associated with a Sale of Commercial Property?

A commercial property sale can may be complex and can be associated with various legal issues, which may include:

  • Land use. Commercial property must typically be used only for commercial uses, not residential and the opposite applies;
  • Zoning. The commercial property must only be operated in areas which are zoned for business use;
  • Additions or renovations. Any and all additions and renovations to buildings must conform with local and state ordinances. This is a specific requirement of zoning laws; and
  • Fraud or misrepresentation. As with any sales or contract transaction, it may occur where one or more parties engages in fraud or deceit when it comes to the terms of the sale, for example, with regards to the value of the property.

There are also various other legal issues which may be associated with the commercial property. In particular, aspects which are related to the business use of the commercial property may be a key bargaining point of the sale.

Examples of bargaining points of a sale may include if there are any outstanding issues regarding property taxes or if there will be any specific requests regarding business property insurance.

What are the Legal Remedies for a Commercial Property Dispute?

The legal remedies available for a commercial property dispute will depend on the type of violation or legal issue that is at hand. In many cases, a dispute can be resolved by awarding a monetary damages award.

Monetary damages are often issued in case involving:

  • Fraud;
  • Breach of contract; or
  • Disputes over property value.

There are other cases which may be remedied by other means, such as one party being required to transfer title to another party. This may occur if a party refuses to transfer the title after a valid sale.

Another example may be the requirement of an order to have the property altered or changed in order to comply with zoning requirements. As noted above, the remedies will depend on the exact needs of the parties to the transaction.

Do I Need a Lawyer for Help with a Commercial Property Sale?

It is essential to have the assistance of a real estate law attorney for help with any commercial property sale issues you may have. Dealing with commercial property and its sale and transfer may involve complex legal issues and different laws.

Your attorney can assist you with all aspects of a commercial real estate sale. Your attorney can assist you with determining which options and approaches are the best fit for your situation. In addition, if any issues arise from the transaction which require you to file a lawsuit, your attorney can represent you during court meetings.

It is also important to note that your real estate attorney can inform you regarding whether your proposed business will comply with local land use and zoning laws. Having a lawyer from the start is one of the best investments you can make in your business.