Commercial real estate is heavily regulated. Investors need to navigate a maze of various legal and regulatory issues. A failure to understand laws in CRE investments can be costly. It can result in fines from the government, or it could even impact the owner’s property rights.

What standard legal and regulatory issues are associated with commercial real estate investing? This post will cover some of the issues investors need to understand.

Important Laws in CRE Investments

Zoning Laws and Land Use

The investor might own the property, but land use laws will dictate what you can and can’t do with it. Investors need to thoroughly investigate local zoning laws before buying a property. It can be incredibly costly to purchase property and then find out the zoning isn’t correct for your intended purpose. Local governments may also change zoning laws occasionally.

Disclosure Laws

Commercial real estate investors also need to know about disclosure laws. These laws require property owners to disclose specific issues with properties to potential buyers or lessees. For example, they might have to disclose various hazards or conditions that may impact the property’s value. Sellers are also supposed to disclose liens or tax issues involving the property. Failure to disclose can lead to significant legal trouble for sellers or landlords.

It is important to note that disclosure laws only apply to issues the owner knows about. You can’t expect the owner to disclose unknown matters. It means if the seller didn’t know, the buyer can’t hold them liable for issues they find after the sale. That is one of the reasons why inspections are such an essential part of real estate investing.

Landlord-Tenant Laws

If you invest in multifamily properties, landlord-tenant laws are an important consideration. These laws cover the rights of tenants and landlords. It will cover property maintenance, lease terms, lease enforcement, eviction laws, and more. Violating housing laws can come with significant consequences. Landlords must ensure they understand these laws and do everything they can to follow them.

Contract Laws

Contracts are a big part of commercial real estate investing. You’ll encounter various contracts when buying and selling real estate. You also have loan documents, leases, partnerships, and other contracts. Real estate investors should understand the basics of relevant contract law. They should also have lawyers and other professionals to help them review and write contracts.

Are you ready to invest in the Columbus, GA, commercial real estate market? Click here to contact the Cummings Commercial Team. We are a dedicated team of local real estate experts who serve the Georgia and Alabama commercial real estate markets. Reach out now to learn more about how we can help.

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