I study once that if you took all the real estate lawyers in Illinois and laid them finish to end along the equator – it would be a excellent concept to leave them there. That’s what I study. What do you suppose that implies?
I have written before about the require to exercise due diligence when buying commercial true estate. The will need to investigate, prior to Closing, every single important aspect of the house you are acquiring. The significance of evaluating each and every commercial true estate transaction with a mindset that after the Closing occurs, there is no going back. The Seller has your dollars and is gone. If post-Closing troubles arise, Seller’s contract representations and warranties will, at ideal, mean high priced litigation. CAVEAT EMPTOR! “Let the purchaser beware!”
Paying added attention at the beginning of a industrial true estate transaction to “get it ideal” can save tens of thousands of dollars when the deal goes negative. real estate developer is like the old Fram® oil filter slogan for the duration of the 1970’s: “You can pay me now – or spend me later”. In commercial genuine estate, on the other hand, “later” may well be also late.
Buying industrial true estate is NOT like shopping for a dwelling. It is not. It is not. It is NOT.
In Illinois, and a lot of other states, practically each and every residential real estate closing calls for a lawyer for the buyer and a lawyer for the seller. This is in all probability clever. It is very good consumer protection.
The “problem” this causes, even so, is that every single lawyer handling residential true estate transactions considers himself or herself a “true estate lawyer”, capable of handling any genuine estate transaction that may possibly arise.
We discovered in law college that there are only two sorts of property: real estate and private home. As a result – we intuit – if we are competent to deal with a residential real estate closing, we must be competent to deal with a commercial genuine estate closing. They are each “actual estate”, ideal?
ANSWER: Yes, they are every actual estate. No, they are not the very same.
The legal issues and dangers in a commercial actual estate transaction are remarkably diverse from the legal difficulties and risks in a residential actual estate transaction. Most are not even remotely similar. Attorneys concentrating their practice handling residential true estate closings do not face the identical challenges as attorneys concentrating their practice in commercial real estate.
It is a matter of experience. You either know the concerns and risks inherent in industrial genuine estate transactions – and know how to deal with them – or you don’t.
A important point to bear in mind is that the myriad consumer protection laws that safeguard residential residence buyers have no application to – and offer no protection for – purchasers of industrial genuine estate.
Competent commercial true estate practice calls for focused and concentrated investigation of all challenges material to the transaction by somebody who knows what they are searching for. In quick, it requires the physical exercise of “due diligence”.
I admit – the physical exercise of due diligence is not affordable, but the failure to workout due diligence can generate a financial disaster for the industrial actual estate investor. Don’t be “penny smart and pound foolish”.
If you are getting a property, hire an attorney who on a regular basis represents house purchasers. If you are acquiring commercial actual estate, hire an lawyer who regularly represents commercial genuine estate buyers.
Years ago I stopped handling residential true estate transactions. As an active commercial genuine estate lawyer, even I hire residential real estate counsel for my personal property purchases. I do that since residential real estate practice is fundamentally distinctive from commercial genuine estate.
Maybe I do “harp” on the require for competent counsel knowledgeable in industrial real estate transactions. I genuinely believe it. I think it is necessary. I believe if you are going to invest in commercial real estate, you should apply your critical thinking expertise and be smart.
POP QUIZ: Here’s is a simple test of YOUR essential pondering skills:
Please read the following Scenarios and answer the queries Accurate or FALSE:
Situation No. 1: It is Valentine’s Day. You are in hot pursuit of the love of your life. A couple of weeks ago, she confided in you that all she ever dreamed of for Valentine’s Day was that her lover would show up at her door, dressed in a white tuxedo with tails and a top hat, and present her with a beautiful bouquet of flowers. You’ve rented the tuxedo, but now you are concerned about how a lot income you are spending.
Correct OR FALSE: Given that flowers are quite substantially all the similar, it is OK for you to skip the roses and show up with a bouquet of fresh yellow dandelions.
Scenario No. two: For numerous years you eyesight deteriorated to the point exactly where you can barely see your alarm clock. You are now contemplating corrective eye surgery so you will not have to have glasses. Your sister-in-law had corrective eye surgery and has had spectacular benefits. She recommends her eye surgeon, but mentions the price is about $five,700 for each eyes and that the surgery is not covered by insurance coverage. A handful of years ago, you had surgery to correct your hemorrhoids and it cost you only eight hundred bucks.
True OR FALSE: Because surgeons all went to medical college and are all health-related doctors, you are getting frugal and wise by asking the surgeon who performed your hemorrhoid surgery to perform your corrective eye surgery.
Scenario No. 3: Quite a few years ago, when you first got married, you asked a former classmate who is a lawyer to represent you in the purchase of your townhome. The cost was only $375. A year later, you started a loved ones and decided you needed a Will. The identical attorney prepared Wills for you and your wife for a total expense of $700. You began your personal company and your attorney pal formed a corporation for you and charged you only $600 plus the cost of the corporate minute book. Years later, when your son was arrested for misdemeanor reckless driving, your attorney friend handled the criminal case and got your son off with supervision for only $1,500.