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How Commercial Property Real Estate Law Is Different Than Residential

If someone is dealing with the legalities surrounding commercial property, they may think it can't be that different from dealing with residential real estate. A commercial property real estate attorney, though, would likely tell you there are plenty of differences. You may run into these four along the way.

More Parties Involved with Deals

Generally, residential property deals involve a seller, buyer, and perhaps a bank. When it comes to commercial properties, though, there may be several parties on both the acquiring and selling sides alone. Multiple financial institutions could be involved, too.

You will also likely find your local government will be more involved than it would be if you just bought a house. Sometimes, even the neighboring property owners may take an interest in the proceedings due to land, water, and air use rights.

Different Contractual Structures

Especially when it comes to renting and leasing activities, you'll find the number of available contractual structures much larger in the commercial sector. For example, virtually no residential renter directly pays the taxes on a house. However, there are commercial rental agreements where this happens.

Similarly, you may encounter contractual structures that assign premises liability, repair, and maintenance responsibilities to the renter rather than the landlord. These arrangements can get complex so it's wise to run them past a commercial property real estate lawyer before you sign anything.

Zoning and Compliance

Commercial activities almost always attract the interest of local, state, and even federal regulators. From the time you decide you want to conduct an activity at a specific property, you need to determine if it is zoned for it. If the location isn't zoned to your liking, you'll have to request a variance from the zoning board.

You might also encounter regulatory issues. For example, properties close to waterways are often subject to stricter state and federal regulations to prevent pollution. Even if your operations will be in compliance, you'll likely also need to submit reports.


The range of potential disclosures for a commercial property tends to be larger. For the most part, a house is a house. Inspectors can make sense of its issues pretty quickly by looking for the usual stuff.

With a commercial building, though, sellers often run into odd disclosures involving things like fire suppression systems or previous tenants' business activities. Contact a commercial property real estate lawyer so you can learn the disclosure rules in your state before buying, renting, or selling a location.