COMMERCIAL PROPERTY CLOSINGS
What are some essential details you should know about commercial closings, and how do they differ from residential closings?
Commercial closings differ from residential closings because a commercial closing includes an asset or stock sale in addition to the sale of real property. While a commercial closing is very similar to the purchase of a residential property, the purchase of a commercial property starts with the Buyer making the escrow deposit. It is typical to place the escrow deposit with a title company or closing agent; however, it is best to have it deposited into an interest-bearing account.
While Federal laws require Sellers of residential property to utilize certain forms or to make certain disclosures, during a commercial property sale, those forms or disclosures are not required. Therefore, it is imperative that both the Buyer and Seller thoroughly review the purchase contract.
Additionally, the Buyer should:
acquire a copy of the most recent survey and review it for inaccuracies;
review all leases connected to the commercial property; and,
review any termination notices that were issued.
The Seller should:
review the survey for inaccuracies;
order a Title Report and review it for any errors; and
verify that any assumptions or assignments of leases are correctly signed.
During the commercial closing process, the Buyer should:
pay for title insurance;
verify that the commercial property complies with zoning restrictions, and,
ensure there are no outstanding tax liens against the commercial property.
A commercial closing also requires the signing authority verification. At this stage of the closing, an individual (usually a corporate representative for the Buyer), is chosen to sign all necessary closing documents. The Seller may want to see proof that that individual is authorized to sign the closing documents. In that case, the Buyer and their representative should provide copies of the company’s corporate documents to verify the same.
At the closing, the Seller conveys title to the Buyer. Finally, both the Seller and Buyer sign all other pertinent closing documents.
Please contact Kimberly M. Soto at 321.972.2279 so she can further advise you of your concerns regarding a commercial closing. The Soto Law Office, P.A. is conveniently located in Altamonte Springs, Florida, near I-4, and proudly serves Brevard, Lake, Orange, Osceola, Seminole, and Volusia Counties.