Whether you are contemplating the purchase or the sale of a commercial real estate property, there are many different issues that you should consider before you open/close escrow or waive contingencies. In an ideal situation, you will retain a real estate attorney from the outset of the negotiations to highlight some of these important issues, and to guide you throughout the process.
In addition to communicating with the various parties involved (e.g., lenders, brokers, city officials), your review of the transaction should include:
• Negotiation and drafting of the Purchase and Sale Agreements.
Each party has different needs and wants in a purchase transaction. At the outset of the transaction, it is important to ensure your specific desires, time requirements, and options are protected. Termination of a purchase agreement may be very difficult and costly if rights are not protected and discussed early on.
• Review leases or contracts affecting the property.
Especially important in commercial transactions, the leases and contracts affecting the property will impact the cash flow, use restrictions and future options for the property.
• Negotiate and advise on financing structures.
Financing structures and loan documents can be just as complex as the rest of the transaction. Not all loan documents are "take-it-or-leave-it" documents; borrowers are able to negotiate the documents and deal terms. Whether the seller facing pre-payment penalties or the buyer negotiating acquisition financing terms, understanding and negotiating the loan documents is key.
• Examine and resolve title and survey issues.
A detailed read of the title report and documents together with a survey of the property, will reveal additional restrictions, regulations, encroachments, and easements affecting the property. Understanding each of these issues will help buyers understand their options and liabilities relating to the property and potential future development.
• Prepare confidentiality agreements, indemnification agreements, assignments, and other closing documents.
Most escrow transactions include numerous additional agreements. Whether the goal is to protect confidential information, assign liability in the event of a lawsuit regarding the property, or simply ensuring the escrow is closed properly and timely, an attorney can assist in protecting the buyer or the seller in a transaction.
• Obtain zoning and other entitlements.
Properties must comply with specific zoning and use requirements. If a property is not in compliance with the current zoning or use restrictions, the parties need to understand why and the repercussions of the noncompliance. Alternatively, if there are plans to redevelop property to another use, that use or development may require the buyer to obtain zoning, use, or mapping entitlements.
• Ensure party compliance with escrow requirements.
It seems simple that the parties would comply with escrow requirements, but for various reasons, some parties simply do not provide information or documentation when needed. Having someone on your side to ensure compliance and to protect your rights will assist in a completed transaction.
Reliance on trusted advisors, including an experienced real estate attorney, will help ensure your particular rights and needs are protected throughout the process.
Bedell can be reached at [email protected]
In addition to communicating with the various parties involved (e.g., lenders, brokers, city officials), your review of the transaction should include:
• Negotiation and drafting of the Purchase and Sale Agreements.
Each party has different needs and wants in a purchase transaction. At the outset of the transaction, it is important to ensure your specific desires, time requirements, and options are protected. Termination of a purchase agreement may be very difficult and costly if rights are not protected and discussed early on.
• Review leases or contracts affecting the property.
Especially important in commercial transactions, the leases and contracts affecting the property will impact the cash flow, use restrictions and future options for the property.
• Negotiate and advise on financing structures.
Financing structures and loan documents can be just as complex as the rest of the transaction. Not all loan documents are "take-it-or-leave-it" documents; borrowers are able to negotiate the documents and deal terms. Whether the seller facing pre-payment penalties or the buyer negotiating acquisition financing terms, understanding and negotiating the loan documents is key.
• Examine and resolve title and survey issues.
A detailed read of the title report and documents together with a survey of the property, will reveal additional restrictions, regulations, encroachments, and easements affecting the property. Understanding each of these issues will help buyers understand their options and liabilities relating to the property and potential future development.
• Prepare confidentiality agreements, indemnification agreements, assignments, and other closing documents.
Most escrow transactions include numerous additional agreements. Whether the goal is to protect confidential information, assign liability in the event of a lawsuit regarding the property, or simply ensuring the escrow is closed properly and timely, an attorney can assist in protecting the buyer or the seller in a transaction.
• Obtain zoning and other entitlements.
Properties must comply with specific zoning and use requirements. If a property is not in compliance with the current zoning or use restrictions, the parties need to understand why and the repercussions of the noncompliance. Alternatively, if there are plans to redevelop property to another use, that use or development may require the buyer to obtain zoning, use, or mapping entitlements.
• Ensure party compliance with escrow requirements.
It seems simple that the parties would comply with escrow requirements, but for various reasons, some parties simply do not provide information or documentation when needed. Having someone on your side to ensure compliance and to protect your rights will assist in a completed transaction.
Reliance on trusted advisors, including an experienced real estate attorney, will help ensure your particular rights and needs are protected throughout the process.
Bedell can be reached at [email protected]