The purchase or lease of commercial real estate can come with its own set of problems. Many of these issues have been around since the beginning of commercial real estate, but some problems have recently developed due to changes in the ways that people work and live. If you have any issues related to your commercial properties, consider contacting an experienced Arizona real estate attorney at Harrison Law, PLLC, by calling (480) 320-2310 to learn more about your legal rights.
What Are Commercial Real Estate Problems?
Compliance with the Americans with Disabilities Act (ADA) has been a concern of commercial property owners since the law’s passage in 1990 and has been the subject to several well-publicized legal disputes in Arizona. Property owners may face civil legal action or be required to retrofit the property in order to comply with the ADA. As a commercial property owner, tenant, seller, or purchaser, you will want to avoid as many of these potential problems as possible. A skilled real estate attorney from Harrison Law, PLLC, can help resolve these common issues.
Some of the most common commercial real estate problems include:
- Cash-strapped tenants attempting to break their lease agreements
- Work-from-home opportunities diminishing demand for commercial office space
- Changes in the commercial real estate investment landscape, including crowdfunding models that present new legal headaches
- Purchasing or leasing a property only to later discover costly flaws with the premises
Certain Commercial Real Estate Problems Are as Old as Commercial Real Estate Itself
Since humans on the North American continent began formally staking claims to property, there have been problems. Squabbles over ownership rights, disputes about terms, and other headaches have plagued property owners for centuries. In the context of the modern commercial real estate landscape, several issues persist year after year, even through sweeping changes in the marketplace. Some of these issues include:
- Failure to disclose
- Environmental or zoning issues
- Questions over responsibility for property repairs
- Contested ownership
Failure To Disclose
The failure of a landlord or seller to disclose important information about a property can sometimes cause more problems to arise. When a purchaser or lessee agrees to purchase or occupy a property, he or she does so under certain reasonable assumptions. One of those assumptions is that the seller or property owner has disclosed all important information about the premises, especially any details that may have prevented the transaction from taking place.
Environmental and Zoning Issues
Local laws and informal regulations can interfere with the plans a commercial real estate owner or tenant may have. Several different problems can arise from zoning laws or environmental restrictions, so potential new tenants or owners will want to research whether the property is the right fit or if these problems can be resolved.
Questions Over Responsibility for Property Repairs
When a property needs repairs, disputes can occur over whether the lessee, the landlord, or another party is responsible for initiating and covering the costs of those repairs. While most parties can turn to their lease to settle these issues, some of these questions do not always have clear answers.
Contested Ownership
A major issue can arise when one party claims ownership of a commercial property and another party makes the same claim. Because commercial property sales can be complex, lengthy transactions, the slightest error can disrupt the transfer of property.
Newer Commercial Real Estate Issues That Are Becoming Increasingly Common
The already complex commercial real estate landscape grows even more complicated with each passing year. From unexpected, widespread work-from-home mandates to subsequent changes in the way that professionals do their jobs, relatively new issues present more challenges to those in the commercial property space. Some of the notable newer problems facing commercial real estate players include:
- Unoccupied commercial real estate—Although not a major issue in Arizona, other cities across the United States are facing an oversupply of office space, a trend that began before the mass office exodus of 2020. Office space owners are looking for ways to overcome this surplus, including converting offices into residences, a conversion that presents its own set of challenges
- Tighter spending in the commercial space—Investors are being careful with commercial real estate spending in the post-pandemic landscape, making each transaction more challenging and sparking greater scrutiny of the details
- Volatile commercial real estate market—According to the American Bar Association, unprecedented uncertainty about the necessity of certain commercial properties has created a volatile market, making valuation difficult for investors who are waiting to see how the market settles
There are several society-wide changes that inevitably affect the commercial real estate space. The ubiquity of social media makes it easier for tenants to criticize landlords or initiate movements against commercial property owners. Crowdfunded investment models also present new legal concerns and challenges. The way we relate, communicate, and do business is always changing, and these changes trickle into the commercial real estate space.
How a Real Estate Attorney Can Help in a Time of Uncertainty
There is usually a solution for every commercial real estate problem, even if that solution is at first unclear. A knowledgeable commercial real estate attorney can help to find those solutions. A potential investor or tenant may want to hire an attorney to help with a real estate problem for any of the following reasons:
- After spending significant effort, brainpower, and money to find a solution, the problem with the property persists
- The attorney has more experience and knowledge in the commercial real estate space
- The nature of the problem is legal, such as a contract dispute, and a legal professional can help to ensure a lawful resolution
- Properly addressing the commercial real estate problem takes time that the investor or tenant does not have
- Simply having another person, especially one with experience in the matter, to evaluate the problem can bring peace of mind
A commercial real estate attorney can work to protect your interests. A lawyer may even be able to help overcome a problem that would otherwise cause great distress, financial concern, and other headaches.
Call Harrison Law, PLLC, for a Consultation Today
No matter the scope of your particular commercial real estate problem, a commercial real estate attorney may be able to help. Commercial real estate problems can be complex, so you will want to find a solution as soon as possible. If you are facing issues with your potential purchase or lease, consider contacting an Arizona commercial real estate attorney at Harrison Law, PLLC, by calling (480) 320-2310 to schedule a consultation today.
© 2022 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
