Your tour of a commercial space for sale in Noida can be a pleasurable and amusing thing to do, as you visualize how your organization may fit into its four walls. However, don’t get so caught up in daydreaming that you forget to ask the significant inquiries that will be the determining factor of your long-term business. All buyers and sellers of commercial properties realize that each transaction takes some level of risk, considering buying, selling, or even leasing property. The real estate world has a long going history and owing to its huge extent, people, or more appropriately generations of people have seen a few more common risks that pop up in any property dealings more frequently than others.
Important Tip – The best way to have a successful resolution to any and all problems is to be prepared. The most ideal approach to do that? Be informed!!!
Here in this blog, we will be discussing a few common property transaction issues, which have the ultimate caliber to transform a simple deal to a failed deal or worse – a LEGAL DISPUTE…..
1) Title Defects – Defects or errors in the title of a commercial property can –
a) Mean you are not actually getting the commercial real estate property you thought you were OR
b) Lead to a lien against the title. A lien is a right to keep possession of property belonging to another person until a debt owed by that person is discharged. This means your deal is flat till the time it is resolved.
Little theory about Title Deed
Typically, any interest in the property is communicated by a Deed, which is recorded in state records every time the ownership of the property changes. Sound organized, it is but at times issues arise because in some cases the deeds are not recorded as per the prescribed format or not recorded at all. Some common issues are –
a) Issues regarding the area or scope of land that the deed covers
b) A part of the land is sold or transferred and the same is not recorded
c) Easements have been left out of the public record
2) Mechanics Liens – Workers or contractors who have their payments pending for the work they have done on the property has the right to file a “mechanics lien” against the property under consideration, as a guarantee to get their money. However, it is not that simple and there are strict timeline rules and filing procedures that must be followed by the contractors to get this through. However, if done – a mechanics lien can put halt to any sale- purchase transactions of the property and taking the worst-case scenario, be used to foreclose on a property.
3) Land use restrictions and Zoning – Hands down, this is one of the biggest and in all honesty AVOIDABLE issues most buyers face. Every part of land available for construction is zoned as per an approved use, like – residential, industrial, office, etc. This information is crucial and if you believe in due diligence, it should be your number one point of any property dealings. Property investor must ensure that the property he is planning to buy is zoned for its intended use. Nobody wants the condition wherein he invested in a land to open a retail store and end up buying a land that is zoned for agricultural use. SCARY NO!!!
4) Market Fluctuations – As per the market Gurus, just as you can’t control or predict the winds, you can’t control or predict the activity of the commercial real estate market. At times it’s HOT and the very next week or month it is not and either way, it brings down to one certain thing – that it will affect your property dealings. Talking in plain words, properties are valued as per their earning potential, which means low vacancy rates, long lease terms, and higher rentals will make a property a hot piece of cake. Contingent upon where a market is in the cycle, rents can be up or down, and vacancy rates can rise or fall and for that matter, the returns on the property will see the same effect. And since, property sales and purchases can take from weeks to months, the value of a property can drop over that time period, thus creating sour tongues for a successful transaction.
5) Environmental Cleanup Issues – This is what is dubious about this potential issue… these issues more than often are not visible or apparent and becomes the problem of owners whether they are behind the same or not. The problems that are covered under this include – hazardous waste that is not managed properly and it becomes owner’s responsibility or can cause him huge financial penalties. The trickiest part of this issue comes when the current property owner is held responsible for the issue and also for its solution.
These were a few issues that can put a full-stop to your commercial real estate deal. For you to avoid them means you have to be informed and prepared and remain one step ahead of every situation.