When people think of commercial real estate closings, they often imagine the big moments: contracts signed, keys exchanged, and businesses celebrating their next chapter. But behind these milestones lies a meticulous process involving careful coordination, legal expertise, and attention to detail.
As an attorney, my role is to ensure that every step of the closing process aligns with my client’s goals while protecting their investment. This blog dives into the unseen work that happens behind the scenes and highlights why these steps are essential for a smooth transaction.
Negotiating the Purchase and Sale Agreement
The purchase and sale agreement is the foundation of any commercial real estate transaction. This document outlines the terms of the deal, such as price, contingencies, timelines, and more. A strong agreement provides clarity for both parties and minimizes the potential for disputes down the line.
For example, when representing a buyer, I ensure the agreement includes sufficient time for due diligence, which could involve inspections, reviewing financial records, and confirming zoning compliance. On the other hand, when working with a seller, my focus is on minimizing contingencies that could delay or derail the deal.
Massachusetts law recognizes the critical role of these agreements, and careful drafting is key to protecting each party’s interests.
Ensuring Permits and Licenses Are in Order
Commercial properties often come with specific zoning requirements, permits, or licenses tied to their use. Whether it’s a restaurant needing a liquor license or an industrial site requiring environmental approvals, these elements must be addressed before the transaction can proceed.
In Massachusetts, local zoning laws under M.G.L. c. 40A dictate what types of activities are permitted on a property. During the closing process, I review existing permits to ensure compliance and coordinate with local boards or agencies to resolve any issues. For instance, I recently worked on a deal where a zoning variance was needed to expand a property’s parking area. By addressing this upfront, we avoided delays that could have jeopardized the closing.
Managing Title Insurance and Escrow
Title insurance and escrow accounts are critical components of a commercial real estate transaction.
- Title Insurance: This protects the buyer from unforeseen claims on the property, such as liens or disputes over ownership. Before closing, I thoroughly review the title report to ensure it’s clear of any encumbrances. If issues arise—like an unresolved easement—I work to resolve them before moving forward.
- Escrow Accounts: These hold the purchase funds until all conditions of the sale are met. Clear escrow instructions are vital to ensure funds are released only when the deal is ready to close.
Under Massachusetts law, title issues must be resolved before the transfer of ownership to ensure a seamless transaction.
Coordinating Multiple Stakeholders
Commercial real estate closings often involve numerous parties, including buyers, sellers, brokers, lenders, and sometimes even tenants. My role is to keep everyone aligned and ensure the process stays on track.
For example, when financing is involved, I collaborate closely with the lender to address their requirements. This may include reviewing loan documents, ensuring compliance with environmental regulations, or coordinating appraisals. By serving as the central point of contact, I help streamline communication and avoid unnecessary delays.
The Final Step: Closing Day
After weeks—or sometimes months—of preparation, closing day arrives. By this point, all documents are reviewed, funds are ready to be transferred, and any issues have been resolved. The closing itself often feels like a formality because of the detailed work that’s been completed beforehand.
For my clients, this is the moment to celebrate. But for me, it’s the culmination of a process that ensures their interests are protected, and their investment is secure.
Why Having an Attorney Matters
Every commercial real estate transaction is unique, and each one comes with its own challenges. From navigating local regulations to resolving title issues, the stakes are high—and so are the risks.
As an attorney, my job is to anticipate potential pitfalls and address them before they become problems. This proactive approach saves time, money, and stress for my clients.
Final Thoughts
A successful commercial real estate closing doesn’t happen by chance. It’s the result of careful planning, attention to detail, and effective communication among all parties involved. Whether you’re buying, selling, or financing a property, having an experienced attorney by your side can make all the difference.
If you’re considering a commercial real estate transaction in Massachusetts, let’s talk. I’d be happy to guide you through the process and ensure your interests are protected every step of the way.
