What are the things I need to consider before purchasing a commercial property?
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When considering purchasing a commercial property, there are several important factors you should take into account:
- Zoning and Land Use: Review the zoning regulations and land use restrictions of the property to ensure that the intended use is permitted in the area. Additionally, verify that the property is properly zoned for your business or any future business you might consider.
- Environmental Concerns: Investigate the property's environmental history to ensure it is free from environmental hazards. This includes looking at records of past uses of the property, soil and water testing, and conducting a Phase I Environmental Site Assessment.
- Title Searches: Verify the property's title ownership, any liens or encumbrances, and ensure the property is being sold without defects, to ensure you are receiving clear title to the property.
- Inspection: Conduct a thorough inspection of the property's physical structure to avoid any future liability for structural or other damages. It is advisable to engage qualified professionals including a licensed building inspector, an engineer, or an architect.
- Lease Agreements: In situations where the property is being sold with tenants, examine the lease agreements to get a clear understanding of tenant obligations and rent paid.
- Financing: Obtain financing from a reputable lending institution with a competitive interest rate and fees on the purchase of the property. An attorney can help in reviewing and negotiating mortgages and provide guidance on other financing options.
- Legal Review: Engage a real estate attorney to review all agreements, leases, zoning laws, and contracts associated with the purchase of the commercial property.
Limitations or exceptions to consider include things like property taxes, insurance requirements, and closing costs. It's also important to consider future plans and how the property will be used in the long-term, as it could impact value and potential resale value in a changing market.
In summary, obtaining legal advice, careful due diligence, and investigation will enable you to make an informed decision when considering the purchase of a commercial property.
