Private assessments / charges come up often in commercial real estate transactions. Such assessments / charges can greatly impact your commercial real estate transaction, so it’s key to have at least a basic understanding of them. In this article, we are going to talk about what you need to know about private assessments / charges in a commercial real estate transaction.
What are Private Assessments / Charges
A private assessment / charge occurs when a party places a lien against a piece of property in order to recover expenses. Private assessments / charges can stem from a variety of different factors, including (but not limited to):
- Utility payments made on behalf of the owner
- Maintenance charges
- Association assessments
Where Do Private Assessments / Charges Arise?
Private assessments / charges can arise in many different places throughout a commercial real estate transaction. Sometimes they can be established in recorded instruments such as:
- Deeds
- Mortgages
- Leases
- Development Agreements
- Declarations
Perhaps the most common example of a private assessment in a commercial real estate transaction is the right of prior approval of a future purchase or occupant – which can be used to keep direct competitors away.
Commercial Title Insurance Company
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