Commercial real estate transactions involve substantial financial commitments and complex legal agreements. Whether you are buying, selling, or leasing commercial property, understanding contract terms before signing is critical. A well-drafted commercial real estate contract protects your interests and reduces the risk of future disputes. Attorneys at SBEMP (Slovak, Baron, Empey, Murphy & Pinkney) law firm provides professional legal advice and services to clients in Palm Springs, Palm Desert, Rancho Mirage, Inland Empire, Orange County, Coachella Valley, and surrounding communities.
Understanding the Scope of the Contract
Commercial real estate contracts are far more detailed than residential agreements. They address property use, zoning compliance, access rights, easements, and future development restrictions. Buyers and sellers should fully understand what is included and excluded from the transaction.
Ambiguities in property descriptions or use rights can lead to costly legal issues after closing.
Purchase Price and Payment Terms
The contract should clearly outline the purchase price, deposit requirements, and payment schedule. Financing contingencies are especially important for buyers who rely on third-party lenders. Sellers should ensure deadlines and default provisions are clearly defined to avoid unnecessary delays.
Due Diligence and Inspection Rights
Due diligence provisions give buyers time to evaluate the property before finalizing the purchase. This may include inspections, environmental assessments, zoning verification, and review of existing leases.
Contracts should specify timelines for due diligence, rights to terminate, and remedies if material issues are discovered.
Representations and Warranties
Representations and warranties are statements made by the buyer or seller about the condition of the property and the transaction. These provisions allocate risk and determine liability if information proves inaccurate.
Carefully negotiated representations help protect against misrepresentation claims and post-closing disputes.
Default and Termination Provisions
Default clauses explain what happens if one party fails to perform. These sections outline notice requirements, cure periods, and available remedies. Both buyers and sellers should understand their rights and obligations if the deal does not proceed as planned.
Why Legal Review Is Essential
Commercial real estate contracts are legally binding and often favor the party who drafted them. Having an experienced real estate attorney review or negotiate the agreement helps identify hidden risks and ensures terms align with your business objectives.
For buyers and sellers alike, proper legal guidance is an essential investment that protects assets and supports long-term success.
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SBEMP LLP is a full service law firm with attorney offices in Palm Springs (Palm Desert, Inland Empire, Rancho Mirage, Indian Wells), CA; Indian Wells, CA; Costa Mesa (Orange County), CA; San Diego, CA; New Jersey, NJ; and New York, NY.
DISCLAIMER: This blog post does not constitute legal advice, and no attorney-client relationship is formed by reading it. This blog post may be considered ATTORNEY ADVERTISING in some states. Prior results do not guarantee a similar outcome. Additional facts or future developments may affect subjects contained within this blog post. Before acting or relying upon any information within this newsletter, seek the advice of an attorney.