What Are Some Common Issues Faced In Commercial Real Estate?
What Is Residential Real Estate? What Is Commercial Real Estate? What Are Some Common Issues Clients Face In These Types Of Cases?
Residential real estate is where you and your family live. It would be a building that’s one to four units in size, meaning a single family, a duplex, a triplex or a quadplex home.
By contrast, an apartment building that has a hundred apartments, while it is residential in nature, that would be deemed a commercial property because it’s greater than four units. Other examples of commercial real estate would be shopping malls, strip malls, gas stations, etc. Anything of this nature is commercial, not residential.
That’s generally the definition between residential and commercial and how you would identify each.
What Kind Of Issues Arise In Real Estate?
With commercial real estate, the issues are never-ending. Every piece of property by definition is unique. If you own a property, and there is the property right next door, even though they touch each other, they’re not interchangeable because that property is unique as you can only have one piece of property.
Oftentimes, issues arise that exist in the chain of title meaning an ownership. Either there were liens against a party or there was somebody who had an interest in the property or maybe somebody died. Let’s say when that person died, he had 14 beneficiaries. Each will get one-fourteenth of their property if the person hadn’t done any other planning. In such a case, attorneys have to deal with 14 different interests. What if the attorney that handled it only dealt with 13 of those interests and they missed one? Somewhere down the line, maybe a few years later, attorneys have to deal with this one-fourteenth interest. They have to go back and fix it.
There are all sorts of issues just on the title side of it. If you are in a landmark situation, then there is a whole other chapter of issues that you can have. In case of tenants, there are so many issues that go along with being a landlord and having tenants as well.
Environmental Issues Faced In Real Estate Property
Another area where there have been a lot of problems in the last few decades is environmental issues. Taking the example of those old gas stations that had their tanks in the ground that leak. Some of them use 40 or 50 years old tanks that have rusted under the ground and then they leak. If you have this piece of commercial property that has an environmental issue, because the ground is saturated with decade’s worth of leaking oil or leaking gas into the ground, it’s a pollution issue.
The environmental protection agency, the EPA, has a whole set of rules and laws and there is the liability or potential liability for anybody that has owned that property. That’s a bigger one and there has been a lot of legwork being done on the state and federal level to limit some of that liability. That’s needed because these properties are just sitting there and nobody wants to buy them because they are afraid that they are going to get drawn into litigation with the EPA and have to pay a bunch of money to clean up the ground. It’s very costly to do environmental cleanup and some people go and look at a property and when they do their due diligence, they realize it used to be a gas station in the 50s and they say, “I won’t buy it.”
There are also properties that are just sitting abandoned. It’s a blight for the community and the properties aren’t being renovated or rehabbed and nothing is happening to them. The owners can’t sell.
There is a lot of activity happening in those areas regarding a move to change the laws and limit or mitigate some of the liability to a current owner, so something can be done with those properties instead of just sitting there and deteriorating.
Read about some Common Issues Faced In Commercial Real Estate or call the law office of Attorney Brian Douglas for an initial consultation at (770) 933-9009 and get the information and legal answers you’re seeking.
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