Hammond, Indiana, Commercial Real Estate Attorneys
Broadly defined, the term "commercial real estate" can be used to refer to any dealing with real property in a business context. At Efron & Efron, in Hammond, Indiana, our real estate attorneys have more than 60 years of experience handling simple and complex commercial real estate transactions.
Knowledgeable Commercial Real Estate Lawyers
Commercial real estate is a broadly used term involving the leasing of office space, purchasing an apartment complex, or selling real property along with or as part of the sale of a business. It could even involve residential properties like apartment complexes or rental houses being held for business or income-producing purposes. Unless the property is a residence where the homeowner is living, you are probably dealing with commercial real estate.
While many of the concepts are the same in commercial real estate as in residential real estate, there can be important differences. Commercial real estate transactions are far more diverse and wide-ranging than selling homes. Any real estate deal has its share of risks, and problems can arise that are not foreseeable. In general, however, the risk and potential liability exposure faced in a commercial real estate deal can be much greater than when you buy a house. Depending on the nature of the business, commercial property may have liens and title problems. There may be greater concerns about hazardous materials or zoning issues. And there will always be questions about the suitability of the property's location for your business needs.
Furthermore, in many instances, commercial real estate transactions are not afforded the same consumer protections as a residential real estate transaction. In some states, for example, residential homebuyers are given greater protections against abusive lending practices than are business owners. Likewise, there are mandatory disclosures required in residential real estate matters that may or may not be required in a commercial transaction.
Minimizing the Risks Associated with Commercial
The objective of our commercial real estate lawyers is to lessen and mitigate the risks associated with:
Real property interests are usually conveyed by a deed. In order to track how property changes hands, every state has a public record system where real property deeds are recorded, becoming a part of the public record system for everyone to see. In theory, this is a great system for keeping track of who owns what, but deeds are sometimes not recorded. Sometimes people sell or transfer partial interests in property. Lenders make loans against properties and record mortgages or deeds of trust that become liens that are of public record. Easements given to cross over or use property may or may not be of record. A judgment against a person can be recorded and become a lien against any real property that person owns, even without his consent. All these things can become a lien against title. You may not be buying everything you thought you were buying, because someone else may have a prior claim that you did not know about.
Indiana Land Use and Zoning Matters
A big concern for a business is to make sure not only that property used in the business is properly zoned, but also that the zoning of nearby or adjacent properties is not going to be a problem. Believe it or not, many people fail in new businesses because they don't investigate the land use and zoning issues carefully enough. And even if you do your homework, issues can come up down the road if governmental agencies or neighbors try to change the zoning on your property to limit your use of it.
Hazardous waste and environmental contamination
The biggest potential concerns to owning business property, though, are hazardous waste or environmental cleanup problems. Property owners are the ones who have primary responsibility for fixing such problems, even if the current property owner did not cause them. These problems may not be obvious or apparent to the naked eye, and could arise from anything ranging from an underground storage tank to an old garbage dump. If you're in the chain of title to contaminated property (meaning that a some point you held an ownership interest in that property), you're potentially responsible for paying for the clean up. The costs for an environmental cleanup operation can run into the millions of dollars.
There are many issues that can arise with respect to how you take title to property, and especially so in a commercial context. If you take title as an individual, you may be exposing yourself to potential liability exposure that you might want to try to avoid, or at least minimize. You might take title through a business corporation, but doing this could be disaster from a tax standpoint. Sometimes, there may be other alternatives such as forming a limited liability company that you would own and control that, in turn, could lease the property to your business entity. There are no universal rules of thumb with respect to how to take title. It's always advisable to seek professional advice, including that of your lawyer and CPA, to assist you in making a smart decision.
Contact our Indiana Commercial Real Estate Attorneys
If you have any questions about purchasing or leasing commercial real estate, please contact the Indiana real estate lawyers at Efron & Efron. Our attorneys can be reached by phone at  931-5380, by e-mail, or by filling out the intake form on our Contact Us page.