For buyers, a good rule of thumb is to only buy commodities they are satisfied with, and the real estate business is no exception. Many individuals venture into the real estate business believing it is a highly profitable endeavour for them some are ready to put wool over buyers’ eyes and with an eye for overwhelming profits.
Disclosure documents are written documents that provide insides into the property’s conditions; influencing the monetary evaluation of the property. These documents vary based on local and state laws. The purchase and sale of commercial real estate is a legal process that abides by specific legislative requirements. When a seller lists his/her commercial real estate for sale in the market, a disclosure document is mandatory for the transaction to take place.
Disclosing information about a commercial real estate property can, in some cases, negatively affect sales price. To avoid this, people are willing to illegitimately increase the profit margin. However, anyone listing their commercial real estate for sale needs to ask themselves a question – is this act worth the risk? Concealing information is a legal offence and the seller can be liable to face legal actions – contract termination, fines, and lawsuits in the long run.
. Purchasing commercial real estate is a considerable financial investment and if deceived the risks are greater. Every buyer is bestowed with legal rights enabling them to purchase only those properties they find satisfactory. Sellers are responsible for disclosing important information so the buyer can decide if the property is going to benefit their objectives or not. A proper seller disclosure consists of the following information:
Easements
Easement is an agreement between a property owner and a second party where the latter gains access to the property in exchange for a specified fee. Properties with a shared driveway, powerlines, and covenants can be under an easement. Buyers can decide whether they wish to purchase properties with easement issues or not. Easements can also affect the value of the property.
Property Defects
Though a commercial real estate buyer inspects the property before buying it, it is in the rule book to disclose any kind of property defects running from structural problems, and insect infestation, to leaks/ dampness. For sellers, the best practice would be to resolve such issues before listing commercial real estate for sale. Contact a trusted property condition assessment consultant more for details.
Utility Issues
Problems related to electricity, plumbing, and HAVC system, if left unaddressed, can cause persistent problems for property owners. It leads to the investment of considerable time and money whilst impeding operations within the business. Before listing the property, utility issues should be introduced to the disclosure document.
If a recent renovation or repairing work; repiping or rewiring was carried out, it should also be in the disclosure document.
Unresolved Notices by Authorities
Authority notices are important to the disclosure document to make the sale and purchase of commercial real estate fully legal. Environmental and Land protection authorities can issue notices to property owners regarding rectification of any sort. If notice from any government body or authority is issued to the seller and has remained unresolved, they should bring it to the attention of buyers, or deal with it before listing the property in the market.
When these details are mentioned in the disclosure document, a seller can create a transparent business module with the buyers. It is a good idea to create an accurate seller disclosure to do things by the book. You can always get help from Axis Property for any kind of commercial real estate operations in Melbourne.
They have a team of experts working in commercial real estate for years who will help you make a commercial real estate transaction beneficial and legal. Enquire with Axis Property today for any kind of commercial real estate service in Melbourne.