Buying real estate for your enterprise can be one of the largest investments that your company will have to make. Due to this, it should not be surprising that making these purchases can be a source of substantial stress for first-time business owners. While you may not know what to expect from this process, there are a couple of tips that you can follow to help you be better prepared to anticipate what will be demanded of you during this process.
Be Prepared To Invest In Title Insurance
While many people know that they will need to pay special attention to the condition of the building, they may not know that it is also critically important to protect yourself from the effects of a bad title. If you are unfortunate enough to purchase property with title problems, it may have any number of problems associated it. For example, tax liens, civil liens or boundary disputes can make the property far more expensive to own.
To protect yourself against these threats, you should invest in title insurance. This insurance will pay to either settle these disputes or it will compensate you for the value of the property if you lose possession of it. While this insurance can seem somewhat expensive, it can be the best option for protecting yourself from these devastating problems.
Understand The Role Of Environmental Indemnity
If you are like many other business leaders, you will likely need to finance the purchase of this property. During the process of being approved for your financing, you will likely be required to agree to environmental indemnification. While this may sound like a complex legal term, it actually covers a relatively simple concept.
This type of clause protects the lender from liability for any environmental damages that your business may cause. This may seem like an odd requirement, but there are many different environmental regulations that apply to businesses, and if you violate these, your enterprise can face shockingly high fees and civil liability. By greeing to this clause, you state that the lender had no knowledge or approval over the actions that led to the environmental damage.
Buying commercial real estate can be a stressful experience due to the high value of this property. However, following these two tips can help first-time commercial real estate buyers better understand what to expect from this process. In addition to reducing stress, this can also help you to avoid some common problems that can make these complex deals even more complicated.
To learn more about financing commercial real estate, contact a firm like NAI Norris Beggs & Simpson.