Commercial Real Estate FAQs
Choose an Experienced Fort Myers Real Estate Attorney
Commercial real estate can be a complicated area of law, and — given the higher-stakes nature of commercial real estate (i.e., the success of a tenant’s business may be reliant on their ability to continue to lease a given premises) — disputes can turn hostile quickly. Skilled representation from the inception of a potential purchase sale or lease, is necessary to help secure a favorable result.
Here at Henderson Franklin, our real estate attorneys provide comprehensive representation to clients involved in both real property transactions and litigation, from assisting with lending agreements to navigating the complexities of a hostile real estate dispute based on defective construction.
If you would like to connect to an experienced Fort Myers real estate attorney at Henderson Franklin, contact our offices at 239-344-1100 or send us an email at email@example.com to schedule a consultation today. We look forward to speaking with you in more detail about your commercial real estate matter.
Frequently Asked Questions About Commercial Real Estate Transactions in Florida
The buyer signed a letter of intent but backed out. Does that qualify as a contract, or otherwise require them to complete the purchase of property?
Letters of intent are signed documents that are intended to reflect the willingness of a given party (either the purchaser or the seller) to transfer the subject property based on certain conditions — such as the cost, the time schedule for the transfer to take place, etc.
Though a letter of intent contains many terms that would not be out of place in a binding contract, a letter of intent is not binding under Florida law. It does not serve as a contract. It exists merely as a statement meant to guide the parties and identify relevant issues.
That isn’t to say that a letter of intent can never bind a party. Depending on the language of the letter, a court may find that it is actually a contract and the parties are therefore bound to said contract. Alternatively, the letter may have induced the other party to take on certain costs, thus giving them a right to sue under the theory of promissory estoppel.
Disputes over letters of intent can be complicated, so it’s worth consulting with an experienced Fort Myers real estate attorney for guidance on how to proceed appropriately.
In the context of commercial real estate, what is the difference between a single net, double net, and triple net lease?
Generally, commercial leases can be split into two main categories: gross leases and net leases.
Gross leases are all-inclusive, in that the tenant only pays the “rent” amount. All other expenses — property tax, property insurance, and common area maintenance — are paid by the landlord. This not only keeps the costs low for tenants but also simplifies payments.
Net leases come in various forms, but each involves the landlord shifting a property-related expense over to the tenant.
Single Net Lease
Single net leases require that the tenant pay their rent plus their proportional share of the property tax for the building, as well as utilities and custodial expenses.
Double Net Lease
Double net leases require that the tenant pay their rent plus their proportional share of the property tax for the building, as well as property insurance, utilities, and custodial expenses.
Triple Net Lease
The most commonly encountered lease form in the commercial context, triple net leases require that the tenant pay for their rent plus their proportional share of the property tax for the building, as well as property insurance, utilities, custodial expenses, and common area maintenance.
Common-area maintenance can often be a sticking point for tenants, who may find that unsavory landlords impose all sorts of unexpected and significant costs on them through this method. As such, the lease agreement should be carefully drafted to ensure that the dynamic of the landlord-tenant terms is specifically outlined.
When tenant improvements are made, who is required to pay for it?
Non-essential tenant improvements are generally paid for by the tenant unless there is some provision in the lease agreement allowing for subsidized improvements (perhaps offered as a concession).
Essential tenant improvements are those that have to be finished before the tenant can actually use the leased property in accordance with their intended purpose. The state of improvement of the premises to be delivered by the landlord should be specified in the lease agreement.
For essential tenant improvements, the landlord and tenant often negotiate subsidization to some degree — the landlord may provide an allowance to help the tenant pay for the improvement. This allowance provision may set out specific limitations and requirements so that the tenant does not overspend on the improvement and make additional changes beyond what is expected.
Can the government “take” my commercial property through eminent domain? If so, under what circumstances?
Yes. In Florida and elsewhere, government entities can exercise their eminent domain powers to take your property, so long as they can prove the following:
- The taking is for a legitimate public purpose (i.e., the government is taking your property to finish building a public highway) that will be going over a substantial portion of your land); and
- The taking will be compensated justly and adequately.
Adequate compensation may not necessarily be measured by the market value of the property taken. In the commercial property context especially, your business (or the rest of your property) may be damaged by the taking. These damages must be evaluated and incorporated into the compensation package.
Speak to a Fort Myers Real Estate Attorney Today to Discuss Your Specific Situation
If you have questions or concerns related to a recent or pending commercial real estate transaction, do not hesitate to contact a Fort Myers real estate attorney at our firm right away. We are here to help.