In our blog a few weeks ago, we talked about why you should have a lawyer when buying your home. The three items that we spoke about in that blog are also important in other real estate purchases, such as the purchase of lease of a commercial building. Having a lawyer negotiate the purchase offer, review essential documents and give you peace of mind during the process are some of the same reasons why it’s important to use a lawyer for commercial real estate, but there are a few other reasons why having a lawyer during this process is essential:
To Buy or to Lease?
It’s common for businesses to lease – or rent – a spot rather than buy the entire property. This is a popular method in urban areas that have large, multi-story buildings with floors for lease instead of making an entire building available. You’ll need to ask yourself (as part of your business) a few questions to help make the decision whether or not to lease instead of purchase. Does your business have established credit? Does your business have access to cash? Depending on your answers, it might be in the best interest of the company to look into leasing a property other than owning.
When leasing inside a commercial building, there are a few things that are different than residential leases to be aware of. In commercial leases, lawyers can help negotiate terms of the lease to make sure you are getting the best deal. Negotiations typically don’t happen with residential leases; they are a set rate that usually can’t be changed. Commercial leases also offer longer terms of tenancy and could go anywhere from one, two, five or ten years. Residential leases are typically only for a 12-month period.
Protecting the Important Things
A lawyer will sit with you during all stages of the bargaining process and can serve as a spokesperson on behalf of you or your company to make sure that the best deal is being put together. They are there to make sure that your interests – both legal interests and business interests – are protected. Lawyers will look at that “what-ifs” that could happen and make sure there is documentation for anything that might happen to the building. As they look through and work on the real estate purchase contract, they’ll be looking for details such as sale price and terms of payment, warranties, conditions to closing, the right to amend and modify terms, and relevant zoning and land use issues (just to name a few!)
Taking Care of Business
If you make the decision to purchase instead of lease, you’ll need someone with experience to help make the process smooth. A lawyer can make sure that material defects, or a known problem by the seller on the property they are selling, are written down. A seller is not allowed to go out of their way to hide any defects that may affect the buyer’s decision to purchase the property. A lawyer will also help set up inspections to look for other defects that might not have been known or seen by the seller. In our blog about residential purchases, we mentioned that lawyers know exactly what to look for in legal documents such as purchase agreements and titles; the same goes for commercial purchases. It’s not the best idea to have someone try to make changes to legal paperwork when they don’t know what to look for; it’s a lawyer’s job to know what to look for.
At Fankhauser Rachel, PLC, we are real people who offer our clients real solutions when they are celebrating milestones or when they are facing obstacles. If you or your business or looking to start a lease at a new building or begin the process of building your own, please contact us today to schedule your consultation and learn how we can help your business make the best decision!