Buying commercial property is an important investment. Business leaders and investors might want to purchase vacant land or an older building that they can then retrofit to meet their needs.
In some cases, the best or most affordable properties on the market may not technically meet the needs of the buyer. There are numerous different types of commercial zoning, and some properties that could work well for intended business purposes may not have the appropriate zoning.
If buyers want to acquire properties zoned for other purposes than their intended use of the property, how can they protect themselves?
Contingencies can be helpful
Buyers making offers to sellers and negotiating purchase agreements can include various contingencies in their documents. A real estate contingency potentially allows a buyer to cancel a closing without risking earnest money or facing claims from the seller.
Zoning contingencies allow buyers to make offers on buildings and parcels that do not currently suit their needs. The sale is then contingent upon their ability to rezone the property or secure a zoning variance from local authorities.
Zoning contingencies can potentially extend closing timelines substantially, which may make an offer unattractive to certain sellers. However, when investing in costly commercial real estate, the protection of a zoning contingency could prove invaluable. Otherwise, the buyer might end up responsible for paying for and maintaining a property that they cannot use for their intended business purposes.
Partnering with a commercial real estate lawyer can help buyers protect themselves throughout the acquisition process. Appropriate contingencies are a critical form of protection for those making offers on real property.