It’s not uncommon for commercial property owners to run into a little financial trouble which forces them to move on from a property. For example, a property may have unpaid property taxes, or a construction firm may file a lawsuit against a property owner for work that has gone unpaid. If there is a lawsuit pending against a property or a property’s owner, you need to know about these issues, because that problem could become your problem in the event you decide to purchase the property.
Purchasing a property with pending litigation can be a financially lucrative move, but it can also be risky, so you’ll want to ensure you proceed with caution. We share some tips in today’s blog about the best practices for purchasing commercial property that is subject to pending litigation.
Buying Commercial Property With A Lawsuit Against The Owner
The good news is that both a seller and a buyer have a vested interest in sharing information about the pending lawsuit as early on in the purchasing process as possible, so you shouldn’t have to find out about a lawsuit just days before closing. Failing to disclose pending litigation can allow a seller to legally pull out of the sale without risk of forfeiting earnest money, so the seller shouldn’t have a reason to try and pull a fast one on a buyer.
Moreover, this pending litigation can complicate a sale, so if the seller truly wants to sell the property, they'll want to avoid any issues that could sink the sale. For example, sometimes a pending lawsuit associated with the property can legally block that sale until the outstanding litigation has been settled, or a buyer’s bank may refuse to provide financing if they find out that the property is subject to a pending lawsuit.
If you’re considering buying commercial property and find out that the property is subject to pending litigation, let your title services team know about it. They will likely find out about the litigation during the course of their investigation into a property, but again, the sooner they learn about the lawsuit, the easier it will be for all parties to navigate the issue properly. Perhaps you’ll need to push closing back so that the seller can resolve the legal matter, or maybe you’ll greatly lower your offer because you expect to take on unpaid taxes that are associated with the property. We’re confident that we can help you find a suitable solution that keeps the sale on track, but in order to explore all options and protect your best interests, we need to know about the lawsuit as far in advance as possible.
It’s certainly possible that you find an incredible deal because an owner is looking to move a property because they are involved in a lawsuit, but don’t rush through the process and get stuck taking on someone else’s legal obligations. Let us navigate this unique situation with you and ensure your best interests are protected.
For more information about purchasing commercial property that is subject to a lawsuit, reach out to the team at Commercial Partners today at (612) 337-2470.