Reasons to hire a lawyer before signing a commercial lease or when buying a property
- Commercial leases are full of gotchas. Commercial leases are usually long, complicated and written to favor the landlord by shifting almost all risk and responsibility away from the landlord and onto the tenant. Tenants often don’t even understand the significance of these provisions. These provisions can ruin the unwary tenant. Having a lawyer to explain these provisions and help you negotiate and revise the lease is vital.
- “Bringing a knife to a gun fight.” The lender, the title insurance company, the escrow agent, and the institutional seller, all have teams of lawyers working on their side. Even individual sellers often have an attorney. Commercial landlords have lawyers on their side. Do you really want to be the only player without an attorney?
- Your agent cannot give you legal advice. Unless your real estate agent is also a licensed attorney, he or she cannot and should not give you legal advice. Furthermore, it is just not reasonable for you to expect your agent to double as your legal advisor.
- Real estate agents cannot draft or revise legal documents. In Texas, agents are limited to the use of the pre-printed forms approved by the Texas Real Estate Commission (TREC). Of course, they can fill-in the blanks, cross out paragraphs, and make minor revisions to these TREC forms. But if you need to make a significant revision to the contract, or don’t understand the seller’s contract, you will need an attorney.
- The importance of Title Commitments. Soon after you sign an earnest money contract, you will receive a title commitment from the title insurance company. The title commitment and exception documents (such as restrictive covenants and easements) need to be carefully reviewed. Any objections to these exceptions must be made promptly, within the deadline provided in the earnest money contract. Having a lawyer review these documents and make any appropriate objections is a good idea.
- Escrow agents can make mistakes. Escrow agents do occasionally make mistakes or omissions in the preparation of deeds, closing documents and title insurance, all of which can spell disaster for the buyer if not caught and corrected before closing. There are also occasional instances when escrow agents fail to act as a neutral party. Having an attorney can help protect you from these situations.