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What legal steps should I take before purchasing a commercial property?

Picture of Chris Battis By   ·  1 minute read

Before purchasing a commercial property, there are several key legal steps that you should take to protect yourself and your investment. These steps may include:

  1. Hire a Real Estate Attorney: It is recommended to hire a real estate attorney to represent your interests in the transaction. The attorney will review the contract and the legal aspects of the purchase/sale, assist with the negotiation of the terms of sale, and ensure that all documentation is executed properly.
  2. Perform Due Diligence: Before finalizing the purchase, it is essential to conduct an extensive due diligence to uncover any potential legal issues with the property. This process involves a thorough investigation of the property to ensure that there are no hidden problems or surprises. Some areas of due diligence include a review of zoning, environmental, and financial issues.
  3. Review and Negotiate the Contract: It is fundamental that you thoroughly review the contract of sale, including the terms and conditions, representations, warranties, and closing conditions. Be sure everything is accurate and that all your concerns are addressed.
  4. Review the Title: Before closing, have the property’s title reviewed, ensuring that there are no existing liens or other claims against the property that could be transferred to you as the new owner.
  5. Obtain Insurance: As a new commercial property owner, it's essential to obtain the appropriate liability and property insurances to protect yourself from any future liabilities or accidents on your property.

In addition to these steps mentioned above, one should also check if there are any zoning regulations or environmental laws which may restrict the usage of the property. It is also crucial to understand the terms of the financing for the purchase. These steps are not exhaustive but are a good place to start. Finally, it is crucial that the buyer takes reasonable precautions before purchasing a commercial property, as proper planning and precautions can reduce the risks of future legal problems.