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  • Writer's picturePorter DeVries

Legal Issues of Commercial Real Estate: A Buyer’s Guide

Commercial real estate can be one of the most profitable fields, but only if both parties come to an agreement without any sort of legal issue. Since commercial law deals with negotiations between businesses, this also means that there are high stakes involved. If you plan on making a business transaction, you should be wary of these most common legal issues before moving forward. As with any sort of property deal, it is always best to make sure you have an attorney by your side to guide you through legal obstacles along the way.

Dealing with Property Valuation

Placing a value on property can be a difficult task because of the unique qualities of every piece of land. In order to obtain an accurate property valuation, it is always best to consult commercial appraisers who have experience in the field and are familiar with the fluctuating state of the real estate market. There are a number of factors that go into determining your property’s value from the age of the building to the location of the land to the square footage. Other variables, such as different sources of income associated with the property, can also influence the final number.

Due Diligence

As a buyer in any sort of property transaction, but especially with commercial real estate, you should perform your due diligence to ensure that the land in question does not violate any rules or regulations. You should consider things such as the property’s current purpose, and whether your intended business will be compliant with local zoning laws. While hiring inspectors is important, you should always make an effort to personally visit the property as well.


Be sure to assess the terms of your agreement and especially the portions that discuss the assumption of liability. As the buyer, you never want to take on the responsibility of paying for fines or even renovation costs because the seller was unaware of previous violations. By demonstrating your due diligence before engaging in any commercial real estate transaction, you are better prepared for complications should they arise after the purchase.

Determining the Financial Risk

Make sure that you properly consider all risks associated with the purchase of a commercial property. For example, you should take into account all possible debts that can be incurred. While the benefits of a real estate investment can be lucrative, they can also be financially draining. If you must take out loans, what circumstance will allow you to make timely payments to your financing company? What circumstances could lead to you losing the property?

If you are looking to buy commercial real estate, you need an attorney to protect your interests throughout the transaction. Call DeVries & Associates today to learn more about your case and what our team can do for you. Call today for a free consultation: 808-465-2500.

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