Commercial Real Estate Law in California

In Scotts Valley, California, "commercial real estate" is any form of land or building which is utilized for a business, as opposed to residential, purpose.

The laws governing commercial real estate in Scotts Valley, California are quite different from those applying to residential real estate.

Buyers and renters of residential property enjoy a considerable number of legal protections. Many of these protections don't apply to buyers or renters of commercial property.

For instance, residential real estate is controlled by laws concerning rent control, living conditions, and other things relevant to buildings where people will be living. Most of these protections don't apply to commercial real estate, because the law assumes that the average business person is a bit more sophisticated in such dealings than the general population, and because a place to do business is usually less important than a place to live. However, the most basic protections, such as protection from fraud and deliberate concealment of defects, still apply.

Common Commercial Real Estate Law Issues in Scotts Valley, California

Financing: The majority of small business owners in Scotts Valley, California probably can't afford to buy much real estate outright, with cash paid up front, so most small business buy commercial real estate with a mortgage. A mortgage is a loan taken out for the purpose of buying real estate, using that real estate as collateral for the loan.

Disclosure of Defects: Sellers of real estate have an requirement to inform prospective buyers of any defects present in the property, such as water damage and other structural problems. Essentially, if the defect is significant enough that it might affect a reasonable buyer's decision on whether or not to purchase the property, and the seller knows about it, it must be disclosed. Failure to disclose such defects would give a buyer the right to sue the seller, and recover substantial damages, including the cost of repairing the defect, compensation for any injuries or illness caused by it, and the reduction in the property's value caused by the defect.

Duty to Inspect: Buyers of commercial real estate are expected to be diligent, and a court will not reward a lack of diligence. Consequently, if the buyer fails to conduct a thorough inspection of the property before buying it, and thereby fails to discover defects which such an inspection could have easily revealed, he will not be able to sue the seller over these defects later on.

Encumbrances: These are defects to title, rather than physical defects. They are legal issues which might make it challenging or impossible for a landowner to make full use of their land. In Scotts Valley, California, these might include easements. An easement is a right to use property held by a party other than the owner. This use is often very specific in scope, such as allowing the holder of the easement to cross the property to access a public road, or something similar. Such rights usually have to be recognized and honored by new owners, so if they buy property not knowing about them, they might be seriously inconvenienced.

Can a Scotts Valley, California Attorney Help?

Because of the complexity and importance of many of the issues regarding commercial real estate, it is almost always imperative to consult with a Scotts Valley, California attorney before buying or selling commercial real estate.