If you frequently buy and sell commercial property, you know that a contract dispute can derail an otherwise promising deal. Resolving these issues quickly and favorably saves both time and money for your business.
These are some of the most common issues that arise with commercial real estate contracts.
Failure to disclose
Real estate sellers must disclose facts about the property that would affect its value, including details about defects. If you purchased a building and later learned that it had a serious and costly problem, you may have legal recourse if the seller misrepresented or failed to disclose the true condition of the building.
When you sign a real estate contract, both parties must also be aware of any legal restrictions affecting the property. For example, the contract could be in jeopardy if information surfaces about title issues, liens on the property, disputed boundary lines, easements, zoning regulations or restrictive covenants.
Sometimes, even careful negotiation cannot save a commercial real estate deal. When this occurs, you and the other party may have a dispute about who keeps deposits on the original contract. When you enter a commercial real estate deal, carefully review the terms and conditions to make sure the contract establishes a remedy for this issue.
You can resolve many commercial real estate contract issues outside of court. For example, New York allows parties to agree to arbitration, in which a neutral third party resolves the contract dispute. You can also go through the mediation process to attempt to negotiate a fair remedy. Knowing the common causes of disputes can help you recognize what to look for in the deal.