2885 Main Street
Stratford, CT 06614
203.378.9595
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Attorney Ben Proto - The Musings of a Mad Lawyer

Sunday, December 24, 2017

Commercial Real Estate Transactions in Connecticut

There are a number of differences between commercial and residential real estate transactions. Whereas residential real estate is purchased by individuals for personal use, commercial real estate, due to the liability risks associated with its ownership, is usually purchased by entities for business purposes. There are a number of issues to consider when conducting commercial real estate transactions in Connecticut, including:

  1. Title Issues - During the title review process, the condition of the title to be transferred from the seller to the buyer must be examined for exceptions. Any exceptions discovered, which can include encumbrances, reservations, and limitations, must be thoroughly analyzed and researched before moving ahead with the transaction.  
  2. Survey Issues - An ALTA survey is a detailed survey performed by a licensed surveyor, prepared in accordance with standards specified by the American Land Title Association. A title commitment must be prepared before an ALTA survey can take place. A title commitment typically includes a legal description of the property and contains information regarding encumbrances. Using the title commitment as a reference, the ALTA survey provides the title insurance firm involved in the transaction with all information needed to insure the title to the property, including:
  • The existence of easements that may encumber or benefit the property;
  • The ability to access public streets from the property;
  • Zoning issues, including any setback requirements;
  • Evidence of flood zones that may affect the property;
  • Possible encroachments across easements or boundary lines;
  • Any evidence of use by other parties;
  • The location of water boundaries; and
  • The names of adjoining property owners.

Environmental and Zoning Issues

Environmental inspection surveys represent another important aspect of commercial real estate transactions in Connecticut. These surveys address a number of environmental issues, including:

  • Asbestos
  • Underground tanks
  • Wetlands
  • Hazardous materials
  • Radon
  • Mold
  • Flood zones

In addition to environmental issues, current and future zoning compliance must be researched. Zoning compliance is an important issue in commercial real estate transactions, as local, municipal, and state zoning laws dictate the ways in which commercial property may be built and used. Therefore, it is imperative that potential purchasers of commercial real estate take zoning issues into consideration prior to closing.

Financial Issues

Potential purchasers of commercial real estate should research and review all financial records of the property or land in question. Typical financial records to be considered include:

  • Annual profit and loss statements
  • Balance sheets
  • Tax returns
  • Insurance documents
  • Existing leases

Connecticut Legal Representation

Real estate transactions, whether residential or commercial, can be complicated, and it’s important to ensure that no details are overlooked during the process. At the Law Office of Benjamin S. Proto, Jr., our experienced Connecticut real estate professionals keep both buyers and sellers apprised of their rights and duties as they navigate the residential and commercial real estate transaction processes. Please contact us for a free consultation.

 





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| Phone: 203.378.9595

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