Miami Living Magazine

Julia Garner

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These types of common pitfalls are best resolved by doing your homework prior to purchasing or leasing any commercial property. Most of these pitfalls cannot be resolved after you have purchased the commercial property or entered into a lease. The lack of knowledge or due diligence on the part of the tenant or buyer of these pitfalls does not provide you with a defense to the purchase or lease agreement, unless the landlord or seller specifically stated that you can use the property in a certain manner and then the circumstances were different after entering into an agreement. However, most landlords and sellers disclaim any responsibility for prohibition of use of the property based on zoning or city ordinances and clearly place the burden on the tenant or buyer to know better before they enter into an agreement. Further most landlords and sellers of a commercial property also provide you with a copy of the common area rules and you agree to be bound by them if you enter into the agreement. Ultimately, the best way to avoid these types of pitfalls is to thoroughly do your due diligence prior to entering into a commercial real estate transaction. Understanding all of the moving parts necessary for running your business, including any hidden expenses beyond the rent, limitations on the use of the property that may affect your ability to generate revenue such as zoning or city ordinances and landlord restrictions before purchase or leasing a commercial building is the best defense for these common pitfalls. ML: How does The Campbell Law Group help clients with the due diligence process during real estate acquisitions? Campbell: We can help clients in the due diligence phase by running title and lien searches, reviewing association or landlord rules for any restrictions on the client’s anticipated use of the property. For instance, some of our clients want to purchase property to turn it into an Airbnb rental property. Many clients are unaware that many cities have instituted restrictions or additional taxes on these types of rental properties that may add to the cost of the rental and make it unprofitable or simply prohibit use of the property in that manner. Our firm also helps with reviewing easements or zoning restrictions that are on the property and any financials integral to the intended purpose of the property such as rent rolls, tax assessments, CAM and tenant’s contractual rights. Our firm also can help review any environmental site concerns that may exist, whether it be due to the property being in a flood zone or possibly contaminated with hazardous materials that would make our client responsible for damages and clean up that is unknown to them at the time of purchasing the property. Finally, our firm can also help resolve any lender requirements that are needed to close and draft any documents or amendment to purchase agreement to memorialize changes in the nature of the transaction after due

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