Whether you have always expected to inherit a commercial property or you are surprised to learn that you’ve been given property in someone’s will, the prospect of inheriting commercial land can be a lot to deal with. You want to make sure you do things correctly and avoid potential issues with the property, but you may not know the first thing you should be doing after inheriting commercial property. To help with this process and ensure you get off on the right foot, we’re using today’s blog to share some steps you should consider taking if you have recently inherited commercial property.
What To Do After Inheriting Commercial Property
Every property inheritance is unique, so all of these tips may not fit perfectly to your situation. That said, odds are you’ll find that life runs a little more smoothly if you work to check off some of the items on this list after you’ve inherited commercial property or land.
- Understand The Inheritance - First, make sure you understand the specifics of the inheritance. Are you sharing the property with one or more siblings or individuals? Are their conditions attached to the inheritance that could impact how the land is managed or whether or not it can be sold? One of the first things you should do is review the will or trust that names you as the person who will be inheriting the property.
- Obtain The Title - Next, it will be very helpful to connect with a title service company who can research the property’s title and clear any potential defects. You would assume that there are no issues with the property since there was no sale, but that’s not always the case. If there are liens or unpaid taxes associated with the property, you’ll not only want to know about these issues, but you’ll want to get them resolved. The team at Commercial Partners can assist with helping you secure a clear title.
- Understand Your Obligations - You’ll also want to learn more about any obligations you’ll be taking on as the new owner of the property. If there is still a mortgage attached to the property, you’ll need to prepare to make payments on this loan if you want to keep the property. It’s also worth understanding what the property taxes are and whether this tax is put into an escrow account when you pay the mortgage or if you will be expected to pay the bill in full when due. Even if the property is paid off, know that you’ll have property taxes and insurance fees associated with the property, so the sooner you understand these expenses and begin budgeting for them, the better.
- Inspect And Insure - Even if you’re familiar with the inherited property, it would be wise to have an inspector come out to assess the property for structural issues, code violations and to simply learn more about the state of the property. A property survey can help you understand exactly where your property ends so that any improvements are confined to your land. Also, you’ll want to secure insurance for the property, and it may be wise to purchase a one-time title insurance policy to protect you against any future claims made against your title.
- Decide What To Do With It - Finally, sit down and think about how you want to proceed with the property. Are you going to keep the business or the commercial property, or are you looking to sell? How will your finances be affected by keeping the property, and what are the financial ramifications for selling the property and paying taxes on the sale? Work with a real estate agent, a title service company and other industry professionals if you need help insuring and inspecting a property you plan to keep, or marketing and clearing a title of a property you want to sell. We’re here to help you navigate the process of managing inherited property, however it fits into your life.
For more information about what you should do after inheriting commercial property, reach out to the team at Commercial Partners today at (612) 337-2470.