Three Things to Look Out for When Buying Commercial Real Estate
The legal principle of caveat emptor (Latin for “let the buyer beware”) may not be common knowledge to the average buyer, but its implications are nonetheless very real: it means that you alone are responsible for determining the quality and suitability of the property you are buying.
Is the Commercial Real Estate Being Properly Presented?No matter how well you know the seller or how honest they may seem, you should never rely solely on their word when it comes to the condition of the property. Even if the property looks good on the surface, there may be unseen structural problems, illegal encumbrances or easements, or environmental hazards. That is why we always recommend conducting a thorough inspection of the property to make sure it matches what the seller has represented. We will also order a professional survey to make sure there are no errors in the legal description, or major encroachments that may prove troublesome later on.
Is the Title and Legal History Clear of Problems?Title represents the sum of your legal rights over the commercial property, such as the right to possess, use, or transfer. It is therefore crucial to make sure nothing is amiss with the title history of the property, such as a missing deed, an unresolved claim, or an unpaid lien, to name but a few common examples. The last thing your business needs is to be saddled with the hassle and costs of resolving a previous title issue, or to have your ownership of the property challenged. Our firm will exercise due diligence in meticulously examining the title and legal history of the property to ensure it is clear of any issues or ambiguities.
Are All Taxes and Government Licenses Current?Businesses are obligated to comply with a myriad of local, state, and federal taxes and regulations. Perhaps the best known of these compliances is the Local Business Tax Receipt (formerly Occupational License), which is issued by local governments throughout Florida to any business that sells goods or services. The fee for this license must be paid annually and the business must have an up-to-date receipt displayed visibly to show it is complying. In addition to making sure the Local Business Tax Receipt is in order, you want to examine all other relevant tax and regulatory documents to make sure nothing is amiss. Any transaction wherein the seller is not forthcoming about these matters should raise a red flag. Your Jurado & Farshchian attorney can assist you with ensuring that the applicable government regulations are complied with and that everything is up to date on the seller*s end.