Lancaster Commercial Real Estate Lawyer
Commercial real estate in Lancaster, SC can be a very lucrative business venture for skilled investors who know how to identify the right market for their investments. The prospect of making a lot of money is enticing, but navigating the legalities to make sure that you remain compliant, and will not face legal challenges, is not always easy. This is why any top investor will tell you that working directly with a commercial real estate attorney is a vital tool to keep you compliant and out of trouble in any business dealings.
What Is Commercial Real Estate?
Commercial real estate is the field of property management and ownership that only pertains to buildings used to run a business. This can include:
- A retail shop selling products directly to consumers
- An office space where employees work
- An industrial building used for manufacturing
Multi-family residential complexes also fall under the commercial real estate umbrella.
What Are Typical Commercial Real Estate Transactions?
It is not easy to just buy a commercial property. The process is filled with different transactions that need to be properly documented and paid for. This can result in different disputes that need an attorney to help resolve. Some of these include:
- A Breach of Contract: There are many different stakeholders involved in commercial real estate transactions. Each individual involved must act in good faith to avoid delaying the deal and keep the transaction compliant with the law. When someone acts differently than they claimed they would in the contract, it can result in a huge financial loss and is deemed an official breach of contract.
- Zoning Disputes: It is not uncommon for disagreements over zoning regulations to occur between the buyer and the local government. These zones are part of an area’s larger urban planning initiatives and will need to be resolved collaboratively with the guidance of a skilled commercial real estate attorney.
- Construction Disputes: If you are in the process of building your commercial property after purchasing land, challenges can arise when working with the various developers and contractors needed to make your property a reality. You may find disagreements over what materials are being used, how the project should be paid for, or the project timeline.
- Partnership or Shareholder Issues: Commercial real estate ventures typically have a combination of partners and shareholders that are responsible for the management and profitability of the operation. Conflict can arise as each of these individuals advances in their roles. They may begin to disagree on either the direction of the business or how decision-making should be handled. Profit-sharing can be one of those issues where an attorney needs to step in and figure out what was originally agreed upon between all stakeholders and how disagreements on the original plan came to fruition.
- Disputes Between a Landlord and Tenant: If your commercial real estate venture is renting out a facility to either a business owner or residents who live in your building, it is likely that a tenant will dispute some aspect of the tenancy agreement. This can include their monthly rent payment, renewing their lease, or even concerns they have over the maintenance of the property.
Closings and Title Insurance
In any commercial real estate transaction, there is always a closing process to finish out the transaction. This is an official mark of the final stage, where all terms and conditions are finalized and signed off by every stakeholder on the project. It is also the stage where all funds are transferred from the old property owner to the new. You will want to have a real estate lawyer review all documents related to the closing, including:
- Deed: This document represents the transfer of ownership from the seller to the buyer.
- Bill of Sale: This includes any personal property or equipment included in the real estate purchase, such as fixtures or equipment.
- Mortgage Documents: If the buyer is not paying for the full property in cash, all mortgage documents for the loan will need to be signed, including a promissory note to ensure repayment.
- Closing Statement: This requires an official document so there is no misinterpretation of how much the transaction costs.
- Affidavits and Disclosures: There may be a mix of these documents related to the property’s zoning compliance, any environmental issues, or any undisclosed liens.
Before the closing is official, a commercial property buyer will likely want to purchase title insurance. This can protect them from any defects with the title that may have been overlooked during the traditional title search. For example, it may be discovered later on that an encumbrance exists for this property because the previous owner was not up to date on paying the taxes. Title insurance can protect you from these instances, ensuring that you do not take a financial hit from this oversight during the purchase process. This is extremely important when you may be tight on cash right after the initial investment.
Key Considerations When Purchasing Commercial Property
Don’t forget these considerations to maximize the value and efficiency of your commercial property purchase:
- Location: This can have a huge influence on the success of your venture and your ability to sell the property in the future and make a profit. Check out the history of property values in the area and make sure there are upward projections for the future.
- Market Trends: It will make you more comfortable to see that the market you are purchasing in is not oversaturated or on the decline. Take a close look at different regional economic indicators and population trends, which can signify a healthy or declining local market.
- Environmental Assessments: Structural defects in the building or contamination concerns can hurt your overall profitability. Take the time to make sure the project is environmentally clear, or that you can afford to fix any issues, before finalizing the transaction.
- Financing: You want your commercial venture to make sense with your overall real estate budget. Ensure that you can secure a favorable interest rate and loan terms so that you will be able to fund other areas of the business that will boost profitability.
Contact Mack & Mack Attorneys Today
If you want to make sure you stay compliant throughout the entire real estate process, connect with Mack & Mack Attorneys. We are a real estate law firm that has been supporting the commercial real estate industry for years. Give us a chance and see how we can boost your confidence and keep your transaction in line with all legal requirements today.