If you have been contemplating purchasing commercial real estate, now might be the right time to pounce. Indeed, according to the National Association of Realtors, the previously red-hot commercial market is showing some clear signs of slowing and becoming more affordable. For a real bargain, though, you might want to look at properties with party walls.
A party wall is a wall that separates two separately owned properties. As a result, the wall typically has at least two owners, with each owner owning his or her side of the wall. If your commercial property has a party wall, though, you should do at least three things before closing.
1. Inspect the party wall
It typically makes sense to carefully inspect any commercial property you are thinking about buying. When your inspector arrives, be sure to ask him or her to take a close look at the party wall. After all, you might have to make extensive repairs to the wall shortly after closing.
2. Read the party wall agreement
Many commercial properties that have party walls also have accompanying party wall agreements. These agreements outline the rights and responsibilities of each owner. They often even have dispute resolution clauses owners must follow. Because the existing party wall agreement is likely to be binding on you, you want to know exactly what it says.
3. Do a title search
Because your commercial property might go right up to your neighbor’s property, it is advisable to conduct a title search. Not only does a title search alert you to cloudy title issues, but it can tell you where your property lines are.
Ultimately, by performing a little extra work when buying a commercial property that has a party wall, you can avoid making a big mistake.