A great location has a clear title.
In the mad rush to close on a deal, it’s amazing how many critical details get overlooked or ignored. Sellers of real estate may feel like they’ve won when a buyer or a buyer’s broker doesn’t ask a dreaded question or request deal-threatening information. A buyer may think that they’ve pulled the wool over an owner’s eyes when their low-ball offer gets accepted with no counteroffer. For fear of losing a ‘can’t miss’ deal, the buyer doesn’t want to ask too many pressing questions of the seller.
For either party, there are times when these ill-advised tactics may not reveal the underlying dangers that exist during their respective ownership or occupancy of a retail property. That outcome doesn’t make the decision to conduct business this way any less irresponsible.
The incredible irony of poor due diligence is that the one thing that shouldn’t be overlooked are the details of ownership. In short, is the seller in possession of a free in clear title? The eventual owner/landlord of a property, as well as the tenant, will ultimately, if not immediately, need to know if the property is subject to any liens, encumbrances or restrictive covenants.
Most tenants looking to lease retail property don’t ask these questions. Most landlords ask these questions during the acquisition process but sometimes sellers don’t know the answers and title companies may not insure the property to the full value of a new and improved property value. It can get muddled and messy.
A great location is one in which the landlords and tenants involved in a retail property can wholly invest in the property without trepidation of loss of their business, capital expenditures or the property itself.
*Please note, this article is not a recommendation or advice on how you should conduct real estate acquisitions. For that type of recommendation or advice, you should hire a licensed attorney or real estate broker to represent your interests.