Investing in commercial real estate can be lucrative, but it can come with some pitfalls that could end up costing you a significant amount of money. Most buyers take the time needed to have a thorough property inspection completed, but a property inspection might not reveal all of the problems that come along with a certain property.
Disclosures are required by law from the seller to help avoid unwanted surprises for the buyer once the purchase is complete.
A lot of the information that the seller needs to disclose when listing a commercial property for sale falls under the material facts category. Material facts are anything that might affect the value or desirability of the property but might not be readily apparent during an inspection.
A seller must disclose whether or not there are illegal units on the property that have been condemned, whether or not a neighboring property owner has a private easement arrangement, or if the property lies on land that can be considered a public right of way.
These material facts need to be made known to potential buyers from the beginning so that an informed purchasing decision can be made.
Individuals selling commercial properties are also legally responsible to provide statutory disclosures to any potential buyers interested in making an offer on the property. Most statutory disclosures pertain to the safety of the property.
Environmental hazards, water heaters that are not properly strapped down, and whether or not the property lies in an earthquake fault zone are all statutory disclosures that a seller is responsible for providing to each and every buyer upon request.
Failure to Disclose
The law does not look favorably on sellers who fail to disclose pertinent information prior to completing a commercial real estate transaction. In fact, failure to properly disclose all required information is considered fraud.
If you discover that there are problems with a commercial property you have purchased that you were not made aware of at the time of the sale, you need to partner with a reputable real estate attorney.
Your attorney will be able to look over your contract to ensure disclosure was not provided and help you take legal action to recoup your investment from the fraudulent seller.
Don't let a dishonest seller compromise your ability to make a profit off a commercial real estate purchase. Educate yourself on the required disclosures and work with an attorney to ensure that your rights as a buyer are protected. For more information, contact a commercial real estate company such as http://www.clgnc.com/.Share