Commercial property is real estate that is owned or used by businesses. Before you invest in a commercial property in the New York City area, you should be advised and represented by a New York commercial real estate lawyer.
Acquiring a commercial property requires a period of due diligence to discover any information that might not be available or apparent in your initial evaluation of the property. Any hidden details could doom an otherwise advantageous transaction.
Experienced commercial property investors use every available due diligence tool to limit the potential for a damaging post-transaction surprise. New investors should use the same approach and avoid rushing into a commercial real estate deal – no matter how attractive it first appears.
What Constitutes Due Diligence in a Commercial Property Transaction?
A buyer who is conducting due diligence thoroughly scrutinizes the fundamentals of the property in question, the seller, the financing, and any compliance obligations in order to mitigate and reduce uncertainties.
The important part of due diligence is diligence. It takes some real effort to examine potential liens, zoning restrictions, and possible encroachments. Existing structures should be inspected to determine what repairs are needed and to estimate the costs.
Will you take on the liabilities incurred by the previous owners’ regulatory and code violations? If the transaction is financed, is there anything that might potentially impair your continuing ability to make regular payments to the lender?
What Will a Commercial Real Estate Lawyer Do on Your Behalf?
Due diligence prior to a commercial property transaction includes accessing, evaluating, and verifying a number of legal documents, including the title, tax certificates, surveys, leases, zoning regulations, and the seller’s operating statements and financial records.
Commercial real estate investors in the New York City area should be advised and guided by a commercial real estate attorney who routinely conducts due diligence for commercial real estate clients.
Like most states, New York has its own unique laws that govern commercial real estate transactions. Your attorney will ensure that no detail is overlooked, that every aspect of the transaction is compliant with the law, and that your long-term best interests are fully protected.
Due diligence goes beyond investigating the property itself. The reputation, standing, and financial history of the seller must also be investigated. The reputation of the owner–and even the past and current tenants–could have a negative effect on your future earnings.
What’s the First Step You Should Take?
The legal issues arising from a commercial real estate transaction will require extensive paperwork and documentation. Before you buy, sell, or lease any commercial real estate in the New York City area, consult first with a New York commercial real estate lawyer.
The due diligence process may only last sixty to ninety days for a commercial real estate transaction, but the choices you make may affect your property–and your profitability–for years to come. The decisions you make in the due diligence process must be the right decisions.
If you are buying, leasing, or selling a commercial property, or if you are involved in any legal dispute over commercial real estate, compile the documents and pertinent legal paperwork, and call 718-237-0411 to schedule your first consultation with a real estate attorney.