Owning commercial real estate can be rewarding in more ways than one. It can be financially profitable, provide tax advantages, and be an excellent inflation hedge. That said, there’s nothing simple about purchasing and owning commercial property. There are numerous commercial real estate laws regulating this industry, which protect your rights and the rights of those you do business with.
Commercial Real Estate Laws You Need to Know
Each year, new legislation is enacted that impacts real estate owners and anyone who leases commercial property. In fact, there are commercial real estate laws at the federal, state, and local levels. Here are some of the top commercial real estate laws you need to know:
1. Landlord-Tenant Laws
Landlord-tenant laws vary widely from state to state. In general, these laws are created to protect the rights of both lessors and lessees involved in leasing agreements. The regulations often govern such things as:
- Privacy rights
- Rental payments
- Required disclosures
- Tenancy duration
- Payment of taxes
- Rights of termination
Whether you plan to be a landlord or a tenant, it’s important to understand your rights and obligations under the various laws in South Carolina and your local area.
2. Disclosure Laws
These types of laws relate to the property’s location as well as any restrictions on the property and the shape it’s in. Generally, disclosure laws exist, so the purchaser or renter of a property understands what they are getting. For example, owners must disclose if a property has a known roof leak or if there are toxic substances on the premises.
3. Zoning/Land Use Laws
Nearly all pieces of property in the U.S. are subject to zoning and land use laws. These are regulations that determine how the owner or lessee can use the property. For example, a particular property in Charleston might be zoned for commercial, residential, or industrial use. There might even be limitations within a category, such as light industrial. If you want to do something different, you’ll need to jump through some legal hoops with a local zoning board.
4. Contract Laws
While contract laws might vary slightly from state to state, most of the contracts drawn up in the U.S. will conform to the Uniform Commercial Code (U.C.C.). Real estate contracts, however, usually follow the Common Law of Contracts. Real estate contracts must be structured in a specific way and contain the right language so they will hold up against any legal challenges. The common law follows the “Mirror Image Rule,” which requires acceptance of the exact terms of an offer for it to be legal. If there are changes to the offer, it’s considered a rejection and a counteroffer.
5. Insurance Laws
All commercial real estate owners should carry insurance coverage to protect their investments and safeguard against liability claims It’s important to understand what type of coverage you need and the particular policy exclusions. Tenants also need their own insurance policies to cover things like property and business interruption. The laws related to insurance will vary from state to state.
Get the Support You Need in South Carolina from Caldwell Commercial
Commercial real estate laws shouldn’t keep you from owning or leasing property. But these regulations do mean you should work with a trusted professional. Caldwell Commercial is an established leader in South Carolina real estate.
Our team of trusted commercial real estate specialists and property managers has over 80 years of combined experience helping clients throughout the Charleston, SC, area. Contact us today to learn more about how we can help you grow and succeed.