I read once that if you chose all of the real estate lawyers in Illinois and laid them end to end along the equator – it would be a great idea to leave them there. That is what I read. What do you suppose that means?
I’ve written previously about the need to use due diligence when buying commercial property. The requirement to research, prior to Closing, each significant aspect of the property you’re acquiring. The value of assessing each industrial property trade with a mindset that once the Closing occurs, there’s no going back. The Seller has your money and can be gone. CAVEAT EMPTOR! “Let the buyer beware!”
Paying extra attention at the start of a commercial property transaction to”get it right” could save thousands of dollars once the deal goes wrong. In commercial property, nevertheless,”later” could be too late.
Buying commercial real estate is NOT like purchasing a home. It isn’t. It is not. It’s NOT.
In Illinois, and a lot of other nations, nearly every residential Acqualina condos Sunny Isles real estate closing requires a lawyer for the purchaser and a lawyer for the seller. This is most likely smart. It’s fantastic consumer protection.
The”problem” this causes, however, is that every lawyer managing residential real estate transactions believes herself or himself a”real estate lawyer”, capable of handling any property transaction that might come up.
We learned in law school that there are only two kinds of property: property and personal property. Therefore – we intuit – if we are competent to take care of a residential real estate closing, we must be competent to take care of a commercial real estate final. They’re each”real estate”, right?
ANSWER: Yes, they are each property. No, they’re not the same.
The legal problems and risks in a business real estate transaction are remarkably distinct from the legal issues and risks in a residential real estate transaction. Most aren’t even remotely equivalent. Attorneys concentrating their clinic handling residential real estate closings don’t face the same issues as attorneys concentrating their practice into commercial real estate.
It’s a matter of expertise. You either know the issues and risks inherent in commercial property transactions – and understand how to deal with them you do not.
A key point to bear in mind is that the myriad consumer protection laws that protect residential property buyers don’t have any program to – and provide no protection for – buyers of commercial real estate.
Competent commercial real estate practice requires focused and concentrated analysis of issues material to the trade by somebody who knows what they are looking for. Simply speaking, it requires that the exercise of”due diligence”.
I admit – that the practice of due diligence is not cheap, however, the failure to use due diligence can create a financial disaster for the commercial property agent. Do not be”penny wise and pound foolish”.
If you are buying a home, hire an attorney who regularly represents home buyers. If you are buying commercial property, employ an lawyer who regularly represents commercial property buyers.
Years ago I stopped handling residential real estate transactions. As an active commercial real estate lawyer, I employ residential real estate counselor for my home buys. I do this because residential property practice is basically distinct from commercial property.
Maybe I do”harp” on the need for competent counsel experienced in commercial property transactions. I genuinely believe it. I feel it’s crucial. I believe if you’re going to invest in commercial property, you have to apply your critical thinking skills and be clever.
POP QUIZ: Here’s is an easy test of YOUR critical thinking skills:
Please read the following Scenarios and answer the questions TRUE or FALSE:
You are in hot pursuit of their love of your lifetime. A couple of weeks ago, she confided in you that 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 coat, and present her with a beautiful bouquet of flowers. You’ve leased the tuxedo, but you are concerned about how much money you’re spending.
TRUE OR FALSE: Since flowers are pretty much all the same, it is OK that you skip the roses and appear with a fragrance of new yellow dandelions.
Scenario No. 2: For many years you eyesight deteriorated to the point where you can hardly see your alarm clock. You are now considering corrective eye surgery so you won’t need glasses. She recommends her eye surgeon, but mentions the price tag is roughly $5,700 for both eyes and the surgery isn’t covered by insurance. A few years back, you had surgery to fix your migraines and it cost you just eight hundred bucks.
TRUE OR FALSE: Since surgeons went into medical school and are all medical doctors, you are being frugal and prudent by asking the surgeon who performed your hemorrhoid surgery to perform your corrective eye surgery.