Whenever you are in the process of hunting for commercial real estate in Markham, one of the things you should expect is that you will need to go through many legal issues before the whole deal is complete. Making sure that you are ready for the legal processes associated with the purchase of such property is therefore important, since it will help you avoid wasting money and time.
For you to do this, however, you would need to have a clear understanding of the legal issues that usually surround property purchases in the region. The fact that such transactions are usually high value means that the risk is usually also very high. Making sure that you get it right from the start is essential to avoiding losing a lot of money. The common issues you should particularly be keen on include:
Proper valuation of the property
Whether you are buying or selling the property, you need to have very clear information regarding the pricing of the property. This is usually one of the trickiest parts of handling commercial real estate transactions, mainly because the cost of real estate is affect ted by so many factors at the same time. In addition to that, future considerations such as how much money one can receive as an income stream from it in the next few years also need to come into play.
To get an accurate valuation of any commercial property before investing in it, you need to get the help of a high quality valuer or other agent who has experience in real estate management. It might seem needlessly expensive to get one, but it will ensure that you get good value either as a buyer or seller.
If you are considering getting a real estate agent to help you with the process, it would be ideal to get one who has specialized in commercial real estate. This way, you can be sure that they have handled such issues in the past, and are capable of valuing the property well.
Carrying out due diligence
Before investing in commercial real estate, it’s also necessary to carry out due diligence. Some of the things you look for include whether there are legal issues associated with the property, and also whether the current zoning will allow you to use it for your intended purposes. In addition to that, you also need to make sure that the boundaries of the property are done right. There are cases where the current property could encroach on surrounding real estate, or the reverse could happen.
In such cases, you need to make sure that the boundaries are clearly demarcated before you buy the property. It’s also important to analyze the current titles to the property to make sure that they are sound. This will help you avoid any legal proceedings against you in future. Once again, a high quality real estate agent should help you do this. Most of them employ attorneys who can help you sort out most of the due diligence.
The issue of assuming liability
When investing in such property, you also need to consider the possibility of assuming liability for legal mistakes made in the past. For instance, if the previous owner of the property did not dispose of toxic waste in the right manner, you might be taken to court if the authorities decide to deal with the issue once you have bought the real estate. To avoid this, you may need to include a clause in your purchase agreement that absolves you from this liability. In such cases, legal obligations that were incurred when the property was under the ownership of the previous owner would be handled by them.
Evaluating your risk
The evaluation of your financial risk is also a component of some of the legal proceedings you might need to go through before purchasing such property. This is particularly important if there is a risk of ruinous outcomes after purchasing the property. For instance, you could buy a block of flats using a mortgage, and then expect to pay back the mortgage using the rent you gain from the property. However, if you buy property that might not attract clients who tend to pay on time, you may fall short on this. In the long term, you may accrue many penalties and even risk losing the property simply because the property is not bringing in as much income as you had anticipated.
Investing in commercial real estate can be a risk, particularly if you consider doing so using a mortgage or other type of loan. Before doing it, it’s good to always ensure that all your bases are covered, particularly when it comes to the legal matters. The above are some of the things you need to consider checking to ensure that this is always done.