There should be no post-closing blues when investing in Florida commercial real estate, but the reality is it can be an all-too-often occurrence. Issues that rear their heads after closing are, at a minimum, frustrating and a nuisance to deal with. At the other extreme, they can be expensive and land you in contentious legal battles.
Fortunately, with expert legal counsel, you can avoid most, if not all, post-closing issues so you can charge full steam ahead with your development plans almost before the ink on the deal even dries.
Common Post-Closing Issues and Ways to Avoid Them
- Title issues – Chief among problems investors may face after closing has to do with the property’s title. You should expect nothing less than a clear title and a commercial property free of any encumbrances, easements or existing liens. A comprehensive purchase and sale agreement prepared by your attorney can mitigate potential legal issues that might arise post-closing, as can a thorough title search conducted by your title company.
- Zoning or development limitation issues – Miami-Dade has strict zoning requirements, and you don’t want to be limited by regulations you could have foreseen. Be sure a full site assessment is conducted prior to closing on a commercial property so you can identify any environmental or zoning restrictions that may dampen development opportunities.
- Existing tenant lease restrictions – Additionally, if you purchase commercial real estate that already has existing tenant lease agreements in place, you should be aware of its implications. The most important consideration when buying a retail location with an existing lease agreement is that you have to honor those lease terms until you are able to negotiate a new agreement. That means there will be less flexibility in terms of potentially raising the rent or passing on other costs to the tenant until a new agreement can be signed.
With commercial real estate transactions, every agreement is negotiable and the better prepared you are going into closing, the fewer issues you’ll have after the fact. Take prudent steps early in your property search to hire an experienced real estate attorney to help you prepare and negotiate important closing documents.
As you consider commercial real estate opportunities in Florida, please get in touch with our experienced attorneys and team at the Law Offices of Alex D. Sirulnik, P.A. and ADS Title Services, Inc.