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  • Blue Pointe Title

What Is A Commercial Lawsuit?

Updated: Mar 15


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Multi-family housing, retail space, warehouse space, office space, or vacant land to develop are all examples of commercial real estate. Transactions involving these types of property occur all the time. 


So, why would you have to face a commercial lawsuit? When do commercial real estate transactions end up in a courtroom? 


The Complexity of Commercial Real Estate Transactions


There is a lot involved in commercial real estate transactions — and this means there are many opportunities for things to go wrong. Often these purchases involve high-dollar amounts. They also come with multiple investors or shareholders as buyers, rather than just a single buyer.


Additionally, the properties are larger and their title search is much more intricate. 


With the right title company, commercial real estate transactions can usually be handled quite smoothly. Though every now and then, their complex nature opens the door for commercial lawsuits. 


How Do Commercial Lawsuits Appear in Real Estate? 


There are many different reasons why lawsuits arise from commercial real estate transactions. Many times it has to deal with the people involved in the transaction rather than the property itself. When negotiations outside of the courtroom don’t work, often the next step is to take legal action. 


A few reasons commercial real estate transactions lead to lawsuits are listed below.  


Breach of Contract 


Breach of contract is one of the most common real estate disputes that end up in court. This occurs when one of the parties does not hold up their end of the deal as outlined in the written agreement. 


When a seller agrees to sell the property to a specific buyer, a purchase agreement is signed. This legally binding contract means that if one of the parties fails to adhere to the terms, they can be forced to do so by a court of law. 


Failure to Meet Disclosure Requirements


All known defects with the property must be disclosed when selling it. This is stated in a Seller Disclosure Statement that is to be presented to the buyer.  


If a seller fails to provide this information, lies about a defect, or tries to conceal it, it could be grounds for legal action. 


Title Disputes


The title to a commercial property is the right to own it. If there is an issue with the title, your rights to the property may be in jeopardy. Many different things can create an issue when it comes to the title, but the main motive for legal action is when it is unclear who the rightful owner is. 


Zoning Issues and Land Disputes


Commercial property is often bought vacant and used for development. However, depending on where the property is located, there is a good chance that it is governed by laws, regulations, and restrictions telling you how the land can and cannot be used. Developers must follow all of these zoning requirements — or find themselves facing legal action. 


Lawsuits can also stem from not acknowledging boundaries and encroachments, too. 


Additional Commercial Real Estate Lawsuits


Many additional situations can arise and lead to lawsuits when it comes to commercial real estate, such as: 


  • Quiet title actions

  • Legal descriptions

  • Forged or fraudulent documents

  • Access issues

  • Survey issues

Trust Your Commercial Real Estate to Blue Pointe Title


Put your commercial real estate investment in the trusted hands of the title agents at Blue Pointe Title. We work hard to ensure that your transaction goes as smoothly as possible, addressing any issues that may come up along the way. 


To learn more or to get started, contact us today at (517) 258-1511.


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