Avoiding commercial real estate mistakes and disputes in California

Litigation and legal disputes are some of the most costly aspects of doing business in California. While most individuals work hard to avoid mistakes and resolve issues quickly and effectively before they blow up into lawsuits, some problems are simply unavoidable.

Real estate owners and investors in Orange County know this all too well. Three areas of commercial property ownership in particular can lead to serious real estate disputes or costly mistakes:

  • Purchasing
  • Leasing
  • Evicting

Buying commercial real estate in Southern California

Some of the most expensive mistakes can occur at the initial stages of acquiring commercial real estate. Review these tips before making that next purchase.

  • Don't be a collector. A commercial property is an expensive investment. As a buyer, do your due diligence to assess the profitability of each property rather than purchasing based just on price or location. One high-income-producing property is often a lot less work and expense than three average-performing properties.
  • What's your type? While there are situations when diversification is a key element to successful investing, choose the type of commercial property that you know how to manage, especially if you are just getting into the commercial real estate business. For example, if you own a number of light industrial warehouses, buying a large, downtown office complex requires a different management skill set.
  • Nothing lasts forever. Your best investment 20 years ago may be a drag on your bottom-line today. Each property has a lifespan, and it is important to establish a long-term plan when you first acquire each investment. Major repairs, routine maintenance costs and ups and downs in the rental market should all be taken into account when assessing your costs over the life of each real estate investment.

Once you own a commercial property, you need to fill it with reliable tenants. Even if you were diligent assessing the property before you bought it, issues regarding breached commercial leases and conflicts leading to evictions can arise.

Pre-eviction steps for commercial tenants

Commercial tenants do not have all of the same legal protections that California law provides to residential tenants. There are steps you should take before and during the eviction process that may help you avoid potential eviction disputes. Some of the pre-eviction steps include:

  • There must be a legal reason for the eviction.
  • The owner or property manager should - but is not required to - contact the tenant directly before proceeding with legal action.
  • The tenant must be served with a formal three-day notice, which follows specific guidelines established by California laws. Proof of service is required.
  • Upon receiving the notice, the tenant has three days to remedy the situation.

Avoid potential pitfalls with commercial properties with the assistance of a lawyer

For every type of real estate issue or dispute, an experienced real estate attorney from Nialis Law Group, A Professional Law Corporation, will help you find a lasting solution. From the day you start searching for a property to drafting leases to selling your investment, a skilled lawyer who is intimately familiar with the market in and near Orange County can help.