What should I expect from my commercial real estate attorney?

Commercial and industrial real estate deals are often complex - more complex, typically, than residential real estate transactions. To navigate the financials, local zoning laws and more, you will need an advocate on your side to help you avoid costly mistakes. Most real estate brokers represent the seller. But a skilled real estate attorney will work to protect your interests and guide you through the entire process from pre-contract negotiations right through to closing. Navigating the process Once you find a property you are interested in purchasing, meet with your attorney to discuss the transaction. Your attorney can help you negotiate an offer and sort through the financing. This expert will also help avoid pitfalls by guiding you through an environmental inspection, scrutinizing any existing tenant leases, reviewing a survey of the property and determining if the building's use complies with the zoning code - all within often tight time frames that must be expeditiously navigated so that you do not lose the deal. Finances Your attorney will help you determine the best means to finance this property. If you are looking to secure a commercial loan, your attorney can help you work with a mortgage broker and ensure that application deadlines and requests for information are met on time. Your attorney will also review and negotiate the loan commitment, which will be the basis for the terms of the loan. However, if you do not qualify for a mortgage, you may need to negotiate with the seller for a purchase money mortgage and/or carry out a cash transaction and perhaps move money around in order to secure the deal. In such scenarios,again, timing is critical. A good attorney will guide you through the process and work within what are often tight deadlines so that you do not miss any important cut-off dates - for if you do, you may risk losing a sizable down payment. Due diligence with leases Prior to closing, your attorney will review all of the leases with existing tenants in order to analyze the rights of the tenants who are already in the building. If it is a residential building, it must be determined if any apartments are subject to rent restrictions. The attorney will also look at lease rates and additional rent under the lease and will look to see if these tenants have purchase options. They may also have an option to renew their leases. The attorney will check if the existing lease states that the tenants are obligated to repair any damage. Title Search Your attorney will order a title search to confirm that the property is indeed owned by the seller and to determine if there are any mortgages, liens, violations or encumbrances against the property. The building cannot be sold unless all title objections are cleared. In addition, through the title search, you will learn about any restrictions that limit use of the land. Zoning To avoid any immediate or future pitfalls, your attorney will check the zoning ordinances and building codes in order to establish if the building is in violation of its certificate of occupancy. If an existing tenant's use, for instance, is not permitted in the local zoning jurisdiction, the new owner could lose that tenant; in addition, the government may impose a fine on that tenant or on you, the owner. Moreover, you must make certain that the building is zoned for your intended use. If necessary, your attorney can also represent you before zoning boards as well as village, town, county and other government entities. The importance of the environmental study Today, environmental studies are a big issue. Soil and groundwater contamination and hazardous materials can be costly to remediate. The responsibility to clean up a property can fall to the new owner, even if a previous owner caused the problem. By arranging for an environmental study, your attorney will help protect your interests. Though environmental studies are often time-consuming, financial institutions require them as part of their criteria for a commercial loan. Real estate inspection Once you obtain an engineer's property inspection report, you will have insight into the physical status of the building, as well as potential repairs that can be expected in the near future. Your attorney can negotiate for the correction of any deficiencies uncovered. Buying a commercial or industrial building does require a certain amount of legwork. But the experienced real estate attorney will help to move the process along so that when you finally are set to close on the property, you will be secure in knowing that you are purchasing a sound investment. Joseph Milizio is a partner in the Real Estate Practice Group at Capell Vishnick LLP, Lake Success, N.Y.