Using an Attorney to Finalize a Commercial Real Estate Transaction

Using an Attorney to Finalize a Commercial Real Estate Transaction

When contemplating a commercial real estate transaction, it is necessary to establish a relationship with a number of service professionals. These people should be experts in their field and able to help guide the process. In addition to a commercial real estate broker, an attorney is a necessary part of a successful transaction.

After finding the new site with a commercial real estate broker, an attorney should be hired to draft and review the lease or purchase documents. Choosing an attorney that only specializes in commercial real estate, or at least one that has a plethora of knowledge in this area is important. Even residential real estate attorneys may not be well versed in commercial transactions. Many times commercial leases vary per transaction and include a number of variables, as opposed to residential contracts which are pretty standard. For instance, some leases make the HVAC upkeep and improvements part of the tenant’s responsibility, while others make it the landlord’s job. This goes for a number of items, from who pays for necessary signage to payment of garbage disposal.

Purchases can also be very complex, as many times the contract must be written to provide the buyer with ample due diligence time and protect them with multiple contingencies. Again, these contracts differ greatly from one transaction to the next. This is in part due to the large variety of commercial real estate types (industrial, retail, office, healthcare, etc…) versus residential. For instance, when drafting a purchase contract for a restaurant it may be contingent on the previous owner leaving all furniture, fixtures, and equipment, meanwhile an industrial contract may be written contingent on the ability for outside storage. Furthermore, the buyer should be given time to inspect the site and meet financial requirements. An attorney can assist in providing this.

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