Commercial Real Estate Attorney

Common Commercial Real Estate Issues

Commercial Real Estate Legal Advice And ExperienceComplexities and unanticipated issues can arise at any point when dealing with real estate on a commercial level. With numerous levels of the government involved in your business, regulations and permits can get messy. The following are a few things to look for when purchasing new property, to help avoid these governmental hiccups:

  • Is your property zoned properly?
  • Is your property contaminated?
  • Does the building encroach on surrounding lots?
  • Are there circumstance that would undermine the anticipated use?

The attorneys with Detroit Real Estate Law engage in numerous roles, especially when it deals with project management and sheparding on behalf of stakeholders.  Our attorneys will meet with you directly, understand your objectives, outline potential issues and obstacles, and establish a timeline for will accomplish tasks both quickly and cost effectively.

Detroit Real Estate Law Example:

An expert EPA consultant hired Detroit Real Estate Law to fast track various approvals to relocate wetlands and streams. Our professional attorneys were able to complete this project in less than 9 months, as opposed to the average of 2 years.  With a hand’s on approach to this project, our attorneys will quickly become your key advisor with every step of your program management.

Tax Planning

The Benefits Of Real Estate And Business Attorneys

Attorneys Who Specialize In Commercial Real EstateMost attorneys will handle your problems, and send you and your business on your way. This traditional approach removes the client from the process entirely, and therefore less informed. Detroit Real Estate Law strives to break those molds with more professional, experienced, and personable attorneys:

  • You’ll always be engaged during the entire project management process
  • You’ll make more informed business decisions and develop a greater appreciation for legal advice
  • You’ll be able to speed through deadlines and government run-around’s

 

Detroit Real Estate Law Example:

An experienced entrepreneur was looking to acquire an additional business. Our attorneys explained to him that not only was he purchasing the business, but the assets as well. Unlike other businesses, an asset purchase increases the chances of a new owner not inheriting undisclosed liabilities and issues that may have existed with the seller of the business. Our attorneys worked with the new business owner to conduct a thorough examination of purchase, to ensure he was not acquiring outstanding debts or liens that were not disclosed. By working with the business owner’s CPA, Detroit Real Estate Law was able to push through the appropriate filings with various governmental entities and tax liens searches. It’s important to check all financial depictions before making an investment!

Heavily Depreciated Property & Transfer Of Ownership

Chances are that if you’ve held onto business property for several years, you’ve taken advantage of depreciation on the building for tax purposes. This applies benefits applies to any business property, including:

  • Rental units
  • Land
  • Business Investment Property

If you are looking to set-up transfers of ownership prior to your death, Detroit Real Estate Law suggests to not place the burden on your heirs. Why? Because; your heirs would then receive a step up in basis.

Detroit Real Estate Law Example:

Tom owned a building for 30 years, and the fair market value on the date Tom passed away was $1.5 million. Over the years, Tom enjoyed tax savings by depreciated the building. Tom’s current adjusted basis, as a result of depreciating the building, was $500,000. If Tom sold the fully depreciated building before he died, for the full $1.5 million, he would have had to pay tax on $1 million. However, because Tom held onto the property, the basis of his heirs became $1.5 million. When his family decided to sell the property the day after Tom passed, for $1.5 million, they ended up paying $0 in taxes.

1031 Like Kind Exchanges

Real Estate Attorneys In DetroitWhen you’re considering moving of relocating to another building, and you own the current building your business is located, Detroit Real Estate Law suggests you look into 1031 Exchange. With substantial tax savings and depreciation recapture, selling the building may lead to additional gains. However, if you are planning on replacing the building with up to three other properties, you could end up delaying payments on taxes indefinitely. Planning is key! Ideally, it is important to identify and secure a replacement property, with an option, before closing on the property you’re selling.

Detroit Real Estate Law Example:

Henry owned a property worth $1 million. Due to the depreciation on his tax return and appreciation of the property over the years, Henry’s basis was $400,000. Once Henry decided to sell the property, he was stuck with paying the tax on the depreciation he took in previous years, plus any additional gain over the cost. However, Detroit Real Estate Law advised Henry to find a new building, in order to identify as a 1031 Exchange. Henry was able to identify the replacement property before he closed on the sale of the existing building, and suffered no negative tax consequences. With proper planning, 1031 Exchanges can benefit several types of businesses or investment properties.

Land Contracts 

What Is A Land Contract?

A land contract is where the seller of the property finances the sale to the buyer. The may occur if the seller and buyer have negotiated a deal, and the buyer cannot obtain bank financing. The seller could potentially obtain approval from the bank, and enter into a land contract that outlines the terms of payment. Land contracts typically have a balloon payment after a certain number of years. This process benefits a buyer who is looking to establish credit payment history and help him or her obtain a bank loan. In order to ensure this process works, the buyer must keep a few things in mind:

  • Understand what mortgages or liens are encumbering the property
  • Require the seller to place the deed in escrow, in order to pay off the land contract and not involve the seller
  • Complete due diligence on the property prior to closing on the land contact and the money changes hands
  • Have a professional attorney prepare and record a Memorandum of Land Contract, keeping terms confidential and placing all third parties on notice of the land contract buyer’s equitable interest in the property