Commercial real estate is a complex industry that requires extensive knowledge on the part of any business owner. It’s not easy to navigate the legal landscape, so you need to be aware of certain laws that can bite you in the back. Failure to do so might result in hefty fines, disastrous penalties, or worse, closure of your business. Therefore, it’s a good idea to be informed to avoid such terrible outcomes. That said, here are four important laws you should know by heart.
1. Zoning Laws
Zoning laws are local regulations that decide how property will be used. You must understand their scopes because they dictate what types of activities you can carry out in your commercial building. They also determine construction guidelines and building height levels. On top of that, these laws determine taxation rules on the property. One good example of how it applies is when factories or industrial plants can’t operate near residential neighborhoods. Make sure to research what zoning laws regulate your property’s geographic location and the limitations of running a business there. It would also help to interview your tenants on what activities they will perform in your building.
2. Landlord and Tenant Laws
These types of laws form the backbone of commercial real estate transactions. Basically, they are contracts between two parties – in this case, you as the landlord and your tenants. Such laws exist to discourage breaches to agreed terms like paying rent on time or not giving proper notice before breaking the lease. Violating them means the accused party can be legally penalized with fines and compensation. Landlord-tenant law ensures that both parties will honor their responsibilities. To add, landlords have to ensure that all utilities are up and running and that the property is livable. Tenants, on the other hand, must maintain the condition of the place from the moment they start to utilize the property.
3. Disclosure Laws
These laws tend to vary depending on the state. In general, the commercial property owner must disclose all the material facts of the building to the other party. Tenants must also admit what they will use the facility for. Disclosure laws mandate that any agreement should be documented and signed before it can be considered legally binding. The reason for this is to provide protection for both parties against fraud, concealment, or abuse when using a property. As the owner, you are obliged to tell your tenants about possible hazards, such as the presence of toxic substances or how much energy usage the building requires. Not only does knowing disclosure protocols protect you from future lawsuits, but it also helps maintain a good partnership between you and your tenants.
4. Contract Laws
These are the most important laws you should learn about. They govern contracts related to the legality of an agreement between two parties. Contract laws require that any contract be in writing and signed by both parties before considering themselves legally bound. Arrangements also need to include specific information about when payment is due, how payment will be made, and what the building will be used for. It also dictates the responsibilities you have as the landlord, including maintaining the property and ensuring the safety of your tenants. This is crucial because it’ll protect you from future lawsuits relating to contract breaches and accidents that sometimes can’t be predicted.
Why You Need a Commercial Real Estate Lawyer
The world of law is a thick jungle filled with complications and legal jargon. It can be confusing for the average person. Understand that the law is constantly evolving, making it difficult to keep up with the changes while running your business.
But this wouldn’t be the case if you have someone specializing in the law by your side. Hiring a commercial real estate attorney will help you avoid potential lawsuits, provide legal advice, and ensure that your contracts reflect your best interests.