In a perfect world, a commercial real estate closing in Texas should take between 30 to 60 days, depending on the details of the property. However, delays can often occur for a variety of reasons, creating a time-consuming and costly situation. Because of this, you need to do your due diligence to ensure you do not run into the most common commercial property closing setbacks.
If you are worried about running into a commercial property closing delay, you should get the help of a real estate closing lawyer in Texas. A lawyer will have experience with the commercial property closing laws in Texas and can help you navigate the most common issues that arise during these deals.
Keep reading to find out what can delay a commercial real estate closing in Texas and how you can prevent this from happening.
Common Causes of Real Estate Closing Delays
Commercial real estate closing in Texas can be a complex process since there are many legalities you have to navigate before the deal goes through. Because of this, there is plenty of room for complications to arise that could lead to the deal being pushed back.
Here are some of the most common causes of delayed commercial property closings in Texas.
Problems With Real Estate Documents
Any errors or discrepancies, such as title issues for a commercial property in Texas, will lead to closing delays. All of the closing and real estate documents need to be accurate and up to date; otherwise, they will need to be corrected and cleared between the parties before the property can close.
Some examples of document problems that you could run into include things like:
- Title defects
- Unresolved liens
- Unpaid HOA fees
- Document typos
Red flags During Inspections
One of the most common reasons for delay is hurdles that arise during the property inspection. There may be environmental concerns, zoning issues, or red flags noted during the inspection.
A common example of this is if the inspection finds serious problems with the property, leading to untimely repairs that need to be accomplished before closing.
Tenant and Lease-Related Problems
If the property has tenants, this can make closing a bit more difficult and more likely to run into setbacks. You may need to take time reviewing estoppel certificates, or there may be issues with the lease agreement. Tenant disputes can also result in delays until the reason for the dispute is resolved.
Financing Issues
Throughout the process of closing a commercial real estate property in Texas, you will be dealing with the financial side of the transaction. If there are lender difficulties, such as delayed financing approval, this will need to be addressed before you can move forward.
Final Walk-Through
Right before closing on a commercial real estate deal, both parties will need to do a final walk-through inspection of the property. Depending on the property and the agreement between the parties, issues may arise that could push back the closing date.
For example, there may be new damage to the property, or the agreed-upon repairs may not have been completed.
How to Keep a Commercial Closing on Track
As you can see, there are many complications that can arise when you are closing on a commercial real estate property. The good news is that there are strategies you can use to help avoid running into these problems for a smoother closing process.
Here are some realistic tips you can use to keep a closing on track:
- Due diligence planning: Early due diligence planning can help identify potential risks and filing issues that could ultimately lead to closing delays. It often includes reviewing all of the property documents to ensure you don’t run into things like title problems or document typos.
- Clear communication: A commercial real estate deal involves many different parties, not just the ones buying and selling the property. Because of this, you need to maintain clear and open communication with all parties, including title companies and lenders, to reduce the risk of running into problems.
- Texas law compliance: Every state has its own set of laws that govern how real estate deals are handled. So, you need to make sure you maintain compliance throughout the closing process; otherwise, this can lead to serious legal complications.
Overall, there is always the potential for closing delays, no matter how well you plan ahead. That is why it is recommended that you work closely with a Texas commercial real estate attorney who can help you navigate any potential setbacks that may arise.
FAQs
How long does a commercial real estate closing take in Texas?
Ideally, a commercial real estate closing should take as little as 30 to 60 days. However, this varies significantly depending on the type of property, the inspection results, the title clearance, whether there are tenants, and financing.
Can a title issue stop a closing completely?
Yes. Any title problems that come up must be addressed before the closing can move forward. And if the title cannot be fixed, the closing can’t proceed at all unless the parties elect to forego the issues presented.
Who is responsible for resolving closing delays?
Usually, the parties involved in the commercial real estate closing are the individuals who need to address whatever is causing the delay. But it is always best to leave this to a commercial real estate attorney, as they will have much more experience handling these types of complications.
What documents are required before closing on commercial property?
You will need a letter of intent, purchase and sale agreement, title commitment, title insurance policy, financing documents, due diligence documents, lease agreements, corporate resolutions, and entity documents.
Get the Help of a Texas Commercial Real Estate Attorney Today
To avoid running into a delayed commercial property closing, there are certain strategies that you can use to keep things moving smoothly. But if you don’t have any experience with real estate closings in Texas, it’s always best to get the help of a professional, such as a Texas commercial real estate attorney. Contact us today at Sewell Sewell Beard LLC by calling us directly at 972-777-5390 to discuss your situation with one of our commercial real estate attorneys.