Commercial real estate law is a body of laws that regulates the sale and transfer of property for business use. Many commercial real estate lawsuits involve a dispute over the same and purchase of property for commercial use.
Commercial real estate law also governs other issues, including:
For example, the majority of local and state laws prohibit business activities in a residential area and vice versa. Therefore, commercial real estate laws also regulate how property may be used in a certain sector, or area, of town, versus other areas.
What Is a Commercial Real Estate Lawyer?
A commercial real estate lawyer is a legal professional who specializes in the commercial real estate laws in a given area. There are some real estate attorneys who handle both commercial and residential legal matters.
A commercial real estate lawyer may also have knowledge of other related legal issues, including:
- Property valuation;
- Contract laws; and
- Business laws.
Because commercial real estate is a complex area of law, some commercial lawyers may only focus on commercial real estate issues.
What Does a Commercial Real Estate Lawyer Do?
A commercial real estate lawyer may handle many different types of tasks, including:
- Researching applicable laws;
- Helping with contract negotiations; and
- Representing clients in court.
A commercial real estate lawyer may also assist with the following issues:
- Factors for whether to buy or lease commercial real estate;
- Types of commercial leases;
- Commercial leases from the tenant’s perspective;
- Reasonable consent to sublease or assign; and
- Assigning commercial leases.
Another major aspect of commercial real estate law is commercial banking. Lawyer who practice commercial banking cases may perform tasks related to:
Commercial real estate attorneys may perform a wide range of duties and tasks on behalf of their clients, especially ensuring that they comply with commercial real estate regulations.
How Much Does it Cost to Hire a Commercial Real Estate Lawyer?
Commercial real estate attorney fees will vary depending on many factors, including:
- The experience of the attorney;
- The services the attorney provides; and
- The location of the attorney.
In many cases, the cost of a real estate attorney is included when property is purchased. In certain cases it may seem like the cost of the real estate attorney is an unnecessary expense.
It is very important, however, that a property transaction is handled properly and accurately in order to avoid future disputes. The attorney’s fees should be considered an investment in the ownership of the property.
The average cost of a real estate lawyer is between $100 and $400 per hour. If an attorney is very experienced, however, they may charge as much as $1,000 per hour.
The average cost of a real estate lawyer will vary greatly depending on:
- Factors related to the level of complexity of the case;
- The skills of the attorney; and
- The location of the property.
There are three categories of fee types that lawyers will generally use to bill for their work, including:
- Hourly rates;
- Contingency fees; and
- Flat fee.
The hourly rate is a common way for a real estate lawyer to bill for their work. In some cases, they may charge a retainer fee, or an amount that is paid in advance which is based on their hourly rate.
The attorney will deduct from that retainer amount until it is used. Once it is fully used, their hourly rate will apply.
The retainer fee is often non-refundable. Contingency fee arrangements are not generally used in real estate cases, but are typically used in personal injury cases.
Another fee arrangement that is commonly used in real estate transactions is the flat fee. Flat fees are often used in cases that are more likely to be simple to handle.
For example, if a transaction is a simple purchase or sale of property, a lawyer may charge, on average, $1,500 to $4,000. It is important to note that this amount may vary by location.
On average, the costs for real estate attorneys include:
- For a residential home attorney, or closing attorney: Between $800 – $1,200;
- For a commercial property real estate attorney, or closing attorney: Between $1,500 – $2,000;
- For rent to own property costs: Between $500 – $750;
- For a property dispute: Between $75 – $125 per hour; and
- For property development: Between $75 – $125 per hour.
For a large, complex transaction, the cost of a real estate lawyer may be between $3,000 and $10,000. In many cases, a real estate lawyer is paid by flat fee at the completion of the real estate transaction.
How Are Real Estate Attorney Fees Calculated?
Real estate attorney fees are calculated based on many factors. A lawyer working in a large city will typically charge more than a newly licensed lawyer in a small town.
Other factors that can affect the attorney’s fee rate include:
- The type of representation the attorney will provide;
- The services the attorney will perform; and
- The fee arrangement for the case.
One major factor in determining the cost of an attorney is the type of representation the attorney will provide. The cost will likely rise as the property value or complexity of the case increases.
The cost will also rise if there are other issues related to the property, for example, a clouded tile or boundary dispute. The cost of the lawyer will also increase based on the services they will provide.
For example, the purchase of a single home will cost less than a large commercial real estate purchase or lease including an analysis of the compliance of the business with local zoning laws.
The type of fee arrangement used is another factor in the cost of a real estate lawyer. These costs will vary depending on whether the attorney:
- Charges an hourly fee;
- Charges a flat fee; or
- Is retained and provides advice on an as-needed basis.
Other factors that influence a real estate attorney’s fees include:
- The amount of time and effort that the attorney will be required to put into the case;
- How complex or difficult the work is perceived to be;
- The skills that are required to perform the services;
- If the attorney has any specialized training or education;
- The average attorney’s fees charged in the area for similar legal services completed by lawyers with similar skills, experience, and reputation; and
- Whether the lawyer charges an hourly fee or a fixed rate.
It is important to remember that although the client is paying for the real estate attorney’s work, they may also be required to pay for other up-front costs that are associated with the transaction, which may include:
- Filing fees;
- Deed recording fees; and
- Other related fees.
Do I Need to Hire a Commercial Real Estate Lawyer?
If you are considering engaging in a commercial real estate transaction, it is in your best interests to consult with a real estate lawyer. The laws that govern commercial real estate transactions are complex and may vary by location.
Commercial real estate laws may even vary within the same city or county. Your attorney can assist you with any issues, questions, or concerns you may have related to your commercial real estate transaction.