Five Issues You Should Consider When Buying Commercial Real Estate

If you are a business owner looking to start or expand a business, having the right location to headquarter your operations is key. However, more than just the physical location, you should watch out for these legal concerns when you are selecting the property you want to purchase. Here are five issues you should consider when you are buying commercial real estate:

1. Is your property zoned for your needs?
   • Zoning laws are a constant hassle in any real estate transaction, but they can be especially disastrous for businesses. If you purchase commercial real estate for your business, only to find out you are not allowed to perform your specific type of business in the area, you may suffer major setbacks to your plans. Make sure to check zoning before you buy commercial real estate to avoid these types of issues.
2. Are there any outstanding mortgages or liens?
   • It is entirely possible that a property you are looking to buy may still have an outstanding mortgage or lien still waiting to be paid. While this can be troublesome, it is possible to resolve an unpaid mortgage or lien during the negotiation process. If you do not discover this issue until later, however, you could be stuck paying the cost, literally and figuratively.
3. Are there any easements or covenants restricting the land?
   • Easements and covenants are types of non-possessory property rights that other people may hold over your land, which restricts your ability to fully take advantage of the benefits of your property. For example, you may be prevented from developing land in a way that blocks a neighbor’s access to a nearby road or waterway, or you may be prevented from adding renovations that impede another property’s ventilation or exposure to natural light. If you buy commercial real estate with restrictive covenants or easements that interfere with your business, you may face litigation when you violate the other party’s rights.
4. Are records related to boundaries and survey data accurate?
   • While it may seem reasonable to simply rely on the information you are given about a property’s boundaries or survey data, this sort of information can be disputed. This can be an issue because it can affect how large the property actually is, and potentially result in legal issues with neighboring properties. Check to see if there are any boundary or survey disputes before you purchase commercial real estate, if you want to avoid these sorts of problems.
5. Are there environmental concerns you need to be aware of?
   • In addition to more conventional legal issues, many municipalities have their own environmental regulations to protect local waterways or nature preserves. These environmental regulations can severely restrict how you use your commercial real estate. There may also be environmental contaminants on the property that you may only become aware of through proper due diligence. To make sure you are compliant with local, state, and federal laws, you should contact a lawyer with experience handling real estate matters to assist you.

At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are looking to buy or sell real estate. We will guide you through the process and help you minimize your legal and financial risks. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.