Thoroughly investigating any potential investment is a must, especially one that is as crucial and important as a commercial real estate purchase or lease. A commercial real estate lease or purchase can quite literally make or break a company, with the right lease being a major asset to the business sand the wrong lease being a huge liability and headache.
Reviewing the seller and every detail about the property is necessary to prevent unexpected events from happening after the transaction is completed. In this article, some of the most important basic due diligence steps for most commercial real estate transactions will be outlined.
Keep in mind that no due diligence list is ever complete, and that it’s always helpful to hire a South Florida commercial real estate attorney at any point during the process. Your attorney can offer you valuable feedback and gives you another set of eyes to catch potential problems with your contract or the other details of your deal.
Look for restrictions that might prohibit the planned use of the property
The buyer must think about his or her goals with the commercial property and find out if there are any restrictions or zoning requirements that might prohibit those goals. There are complex legal requirements, potential impediments, licenses and zoning restrictions that must be considered for each commercial property being considered, whether it is a purchase or a lease.
Hiring a South Florida commercial real estate attorney to review and research potential restrictions is very effective, as any experienced attorney will be able to quickly find out about legal impediment on a particular property.
Review all documents associated with the property
Another crucial due diligence step is to review all of the documents associated with the property including any current leases, title insurance policy and other insurance policy, and any other agreements.
These documents can provide valuable information about the current state of the property. The title insurance policy will show information about any current encumbrances that may cause potential problems in the future such as liens or other types of financial servitude, easements, or leases.
The seller should be researched as well
Another key due diligence step is to research the seller, whether it is an individual, partnership, trust or business entity. Requesting tax returns, profit and loss statements, loan documents, utility bills, and any other documents associated with the property is always a good idea.
The more documentation that you are able to acquire about the property and the seller, the easier it will be to determine whether or not it is a good option for your intended purpose.
If you are in the process of buying or leasing a commercial property, schedule a consultation with Mark Schecter at Schecter Law today by calling 954-779-7009.