When two or more parties come together and agree to do business or to partner together to achieve common goals, the entire process from start to finish can seem somewhat intimidating. Sometimes, parties in a commercial real estate transaction have little to go on at first, sometimes, just a smile and a handshake. This is especially true if looking to begin a project related to the development or construction of commercial real estate. When the agreement begins to take shape, there are a number of measures a party can take to protect themselves in these situations.
There will no doubt be much paperwork involved in the process of a commercial real estate deal. Between administrative, executive and other orders, there are legal implications to consider. Sometimes, companies are so ready to begin a project that they forget to draft documentation that would serve their best interests in case of unfortunate circumstances or a breach by the other party involved.
That’s why it’s important to draft a smart purchase agreement when in the process of a commercial real estate deal. Whether redeveloping an area or building from scratch, there are risks that each party takes when entering a deal of this magnitude. Since a commercial real estate deal can require much in investment prior to its return on the initial investment, it’s possible that a party could stand to lose their investment if something were to go awry. While you can’t always protect yourself from market shifts, a business can protect itself in case of breach or other acts that negatively impact the project and a company’s bottom line.
Commercial real estate contracts can cover instances of what defines breach, what potential remedies are and the like. This can help to ease the sting of an unfortunate instance in a commercial real estate deal between the parties. Since both will have agreed to the stipulations prior, there is often little to disagree about in how to proceed. However, these contracts should be well-written and well thought out to avoid any issues with the language and to avoid loopholes.