I study once that if you took all the true estate lawyers in Illinois and laid them end to finish along the equator – it would be a great thought to leave them there. That is what I read. What do you suppose that means?
I have written prior to about the need to physical exercise due diligence when acquiring commercial true estate. The require to investigate, just before Closing, each and every important aspect of the property you are acquiring. The significance of evaluating every industrial true estate transaction with a mindset that once the Closing happens, there is no going back. The Seller has your money and is gone. If post-Closing problems arise, Seller’s contract representations and warranties will, at most effective, mean high priced litigation. CAVEAT EMPTOR! “Let the purchaser beware!”
Paying additional attention at the beginning of a commercial real estate transaction to “get it proper” can save tens of thousands of dollars when the deal goes poor. It is like the old Fram® oil filter slogan in the course of the 1970’s: “You can spend me now – or pay me later”. In commercial real estate, even so, “later” may perhaps be too late.
Buying commercial real estate is NOT like purchasing a house. It is not. It is not. It is NOT.
In Illinois, and a lot of other states, practically every single residential true estate closing demands a lawyer for the purchaser and a lawyer for the seller. This is in all probability intelligent. It is superior consumer protection.
The “dilemma” this causes, nevertheless, is that every lawyer handling residential real estate transactions considers himself or herself a “true estate lawyer”, capable of handling any real estate transaction that may perhaps arise.
We learned in law college that there are only two kinds of property: actual estate and private property. Consequently – we intuit – if we are competent to deal with a residential true estate closing, we must be competent to handle a industrial real estate closing. They are every “actual estate”, right?
ANSWER: Yes, they are every single actual estate. No, they are not the similar.
The legal problems and dangers in a commercial actual estate transaction are remarkably different from the legal troubles and dangers in a residential true estate transaction. Most are not even remotely equivalent. Attorneys concentrating their practice handling residential genuine estate closings do not face the identical challenges as attorneys concentrating their practice in industrial genuine estate.
It is a matter of expertise. You either know the problems and dangers inherent in commercial true estate transactions – and know how to deal with them – or you do not.
A essential point to recall is that the myriad consumer protection laws that protect residential residence buyers have no application to – and offer no protection for – purchasers of industrial real estate.
Competent industrial genuine estate practice requires focused and concentrated investigation of all challenges material to the transaction by a person who knows what they are looking for. In brief, it calls for the physical exercise of “due diligence”.
I admit – the exercising of due diligence is not cheap, but the failure to exercise due diligence can generate a economic disaster for the industrial true estate investor. Don’t be “penny wise and pound foolish”.
If you are buying a household, employ an attorney who consistently represents home purchasers. If you are getting industrial real estate, hire an lawyer who consistently represents industrial actual estate buyers.
Years ago I stopped handling residential actual estate transactions. As an active commercial true estate attorney, even I hire residential actual estate counsel for my own residence purchases. I do that mainly because residential real estate practice is fundamentally unique from industrial actual estate.
Possibly I do “harp” on the need for competent counsel knowledgeable in industrial true estate transactions. I genuinely believe it. Godrej Matunga think it is important. I believe if you are going to invest in commercial actual estate, you ought to apply your crucial thinking expertise and be intelligent.
POP QUIZ: Here’s is a easy test of YOUR important thinking skills:
Please read the following Scenarios and answer the inquiries True or FALSE:
Scenario No. 1: It is Valentine’s Day. You are in hot pursuit of the really like 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 leading hat, and present her with a stunning bouquet of flowers. You have rented the tuxedo, but now you are concerned about how a lot cash you are spending.
Accurate OR FALSE: Due to the fact flowers are fairly considerably all the very same, 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 where you can barely see your alarm clock. You are now taking into consideration corrective eye surgery so you will not will need glasses. Your sister-in-law had corrective eye surgery and has had spectacular results. She recommends her eye surgeon, but mentions the price is about $five,700 for both eyes and that the surgery is not covered by insurance. A few years ago, you had surgery to right your hemorrhoids and it price you only eight hundred bucks.
Correct OR FALSE: Due to the fact surgeons all went to healthcare school and are all health-related medical doctors, you are becoming frugal and smart by asking the surgeon who performed your hemorrhoid surgery to perform your corrective eye surgery.
Scenario No. three: Many years ago, when you initially got married, you asked a former classmate who is a lawyer to represent you in the purchase of your townhome. The price was only $375. A year later, you began a family members and decided you required a Will. The similar lawyer ready Wills for you and your wife for a total cost of $700. You started your personal small business and your lawyer friend 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.