Want to Sell Commercial Real Estate? Better Know the Law
Saturday, March 8, 2014, 6:00 AM | Leave Comment
One financial opportunity you may be considering is investing in commercial real estate. While this can certainly be a profitable endeavor, selling the property may not be as easy as it sounds. For one, you need to make sure you are following the law.
Below are some of the elements of commercial real estate law you should be familiar with.
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What Is Legally Commercial Real Estate?
Commercial real estate is a piece of land that is purchased by a person with the intent of using it to produce a profit. This can include the land and any buildings or fixtures within it.
This wide classification can cover many different kinds of property. It could, for example, include an office building, a restaurant or a patch of land likely to be developed into a residential area.
Over all, commercial real estate must be connected to the land. It does not include movable property.
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What Is the Difference Between Commercial Real Estate and Residential Real Estate?
However, not all real estate is considered commercial real estate under the law. The other largest classification is residential real estate.
Residential real estate is property that is used primarily as a living quarters. For example, houses built in a subdivision are residential real estate.
This is due to the fact these properties are not owned to make a profit on the value of the land itself. Other examples may include apartment complexes and even factories.
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Commercial Real Estate Contract Law
One of the most integral elements of the law in regards to selling commercial real estate surrounds the contract that is formed to make the sale.
The contracts for most sales in the United States are guided by the Uniform Commercial Code. However, this is not the case for commercial real estate. Instead, the common law regarding contracts guides commercial real estate deals.
This common law states that no terms of such a contract can change after it is accepted by both parties. This is not the case for the Uniform Commercial Code.
This is why you have to be extremely careful when drafting the contract for a commercial real estate sale.
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Land Use and Zoning Laws
Another very important set of laws that determines exactly how you can use your real estate is land use and zoning laws. As can be guessed, these can differ significantly from place to place.
Most of these laws have been left up to state and local governmental agencies. Zoning regulations, for example, will determine whether or not a business can exist on a piece of property. It may even determine what kind of business can be opened there.
For example, in certain cities, it may be illegal to sell food from a cart in certain parts of town. If a business does not follow such laws and ordinances, it will likely be shut down.
If you want to find out more on how to purchase and sell commercial real estate, click here. While it isn’t the simplest way to invest, it can be extremely profitable if done correctly.
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