After the uncertainties of 2020, the commercial real estate market has continued to be resilient. Even as many companies have updated their policies to offer more work-from-home or hybrid opportunities for employees, commercial real estate properties can still be a smart investment. According to the latest commercial real estate industry Insights, “Multifamily performance is strong, retail remains resilient and the industry has started to normalize. Investment opportunities include workforce housing development and office bargains.” Those hoping to expand their real estate portfolios or purchase commercial property for the first time will likely find several opportunities in Texas. However, before you rush into a commercial real estate transaction, it’s essential to take stock of the potential legal risks of buying commercial property in Texas so that you can proceed with greater understanding and confidence.
With a substantial investment on the line, you likely want to protect your best interests as much as possible as you move through the commercial real estate transaction. Enlisting the guidance of a highly qualified and knowledgeable commercial real estate attorney is the best way for you to make informed decisions with greater certainty. Together, you can review the potential risks and avoid costly mistakes so that you can move forward with greater ease. Let’s take a look at how partnering with a skilled and experienced commercial real estate attorney can help you follow a legal checklist when buying business property in Texas. You will want to complete the purchase with confidence.
Common Legal Risks When Purchasing Commercial Real Estate in Texas
When done thoughtfully and strategically, purchasing commercial real estate in Texas can be a smart investment. However, it’s important to look out for any potential commercial property liabilities that could jeopardize the success of your investment. Below are just a few of the most common legal risks to look out for when navigating a commercial real estate transaction.
Title Defects and Liens
Any party who is interested in purchasing property should take certain steps to perform their commercial real estate due diligence. This means that you and your attorney should gather as much information as possible about the property you are hoping to purchase. Details like whether the property has outstanding mortgages or liens, undisclosed easements, unpaid property taxes, or unresolved probate issues can significantly affect the property and lead to complications after the transaction has been completed. Commercial property title problems can be minimized or avoided altogether when you work with your trusted and experienced Texas commercial real estate lawyer to identify the most strategic path forward.
Zoning Restrictions and Violations
Zoning laws can be challenging to comprehend when purchasing commercial real estate in Texas. It’s essential to review all local zoning ordinances to ensure that the property remains in compliance with these regulations and the zoning meets with your intended use. If the property has obtained prior approval or secured permits, it’s worth confirming these approvals with the corresponding authorities to make sure that you do not find yourself in violation of zoning laws later on.
Environmental Hazards and Liability Issues
There are a number of environmental regulations that can lead to significant and costly problems for unsuspecting commercial property owners. If you purchase a property without checking for environmental hazards (i.e., asbestos, harmful chemicals, etc.), you may still be held liable for cleanup costs—even if you did not cause the contamination and were unaware that the property was affected by these contaminants. Your highly experienced commercial real estate lawyer can help you have the property assessed for environmental hazards so that you can proceed with the transaction with all of the details you need to make fully informed decisions.
Hidden Contractual Risks to Know When Buying Commercial Property in Texas
In addition to the potential legal risks affecting the property about to be purchased, there are also contractual risks associated with buying commercial property in Texas. For instance, poorly drafted or unclear purchase agreements can leave the buyer vulnerable to costly legal disputes later on, especially if the contractual language is too vague or broad to provide substantial protection. Or, failing to comprehend the terms and conditions of the contract or any warranties associated with the property can also expose the potential buyer to unnecessary risks once the transaction has been completed. The most effective way to safeguard your commercial property investment is to work with a trusted and highly skilled Texas real estate attorney who can answer your questions, address your concerns, and support you at every stage of the transaction.
Tips For Mitigating the Legal Risks of Purchasing Commercial Real Estate
Now that we have highlighted some of the most common legal risks associated with purchasing commercial property in Texas, it’s worth reviewing some of the steps you can take to mitigate these risks and proceed with greater confidence. First, it’s highly recommended that you engage the services of a local Texas commercial real estate attorney as soon as possible so that you can begin assessing the property and creating a checklist to guide you through each step of the process. Your attorney can help you conduct a thorough title search to determine whether there are any issues that need to be addressed before you proceed with the transaction. Additionally, your knowledgeable attorney can connect you with highly qualified professionals who can conduct environmental and structural inspections of the property to ensure that the premises is free of hazards or structural defects. Moreover, simply knowing that you have a dedicated and caring legal advocate by your side during this critical time can give you the reassurance and confidence you need to approach the process with greater ease and clarity.
If you are getting serious about purchasing commercial property in Texas, it’s worth enlisting the guidance of a highly qualified and experienced commercial real estate attorney who can look out for your best interests at every opportunity. At Sewell Sewell Beard LLC, we are committed to working closely with every client we serve to identify their needs and help them achieve their goals. Please get in touch with our Prosper, Texas office at (972) 777-5390.