Commercial Real Estate Transactions – Caveat Emptor
While seller disclosure requirements have become a part of residential real estate transactions, caveat emptor still applies to commercial real estate transactions in Florida. Caveat emptor is Latin for let the buyer beware. It is a warning to the purchaser that he is assuming the risk that the property might be either defective or unsuitable to his needs.
Every commercial real estate transaction should be based on a contract that has been drafted for the specific transaction and clients. Luxury real estate attorneys are beneficial for drafting as well as other aspects of a real estate transaction. Provisions in the contract should address the various issues that may arise and the options for relief. A buyer should use due diligence to discover latent defects because the seller is not required to disclose any known latent defects.
While the seller may remain silent as to any known latent defects, the seller may not interfere with a buyer’s attempts to discover any defects. The buyer may not actively conceal or fraudulently misrepresent defective conditions. Further, if the parties contract for certain disclosures about the property, the seller may not breach these provisions. A buyer may require the contract to contain a provision such as: “Seller warrants that there are no facts known to Seller materially affecting the value of the Real Property which are not readily observable by Buyer or which have not been disclosed to Buyer.” Many cases that would have been decided for a seller because of the doctrine of caveat emptor have been decided in favor of a buyer because of a well drafted contract provision that increased the seller’s duty.
Florida’s District Courts of Appeal have all heard cases dealing with caveat emptor in commercial transactions. While coming close to overturning the doctrine, courts have stopped short and left such a significant change up to the Florida Supreme Court; however, the Florida Supreme Court has not yet ruled to overturn the doctrine of caveat emptor applying to commercial transactions. A buyer of commercial luxury real estate should be more cautious.
Commercial real estate transactions are often complex and require meticulous attention to detail and superior negotiation skills. Our Fort Lauderdale real estate law firm is prepared to put these well-honed skills to use to maximize the potential of your deal.
Have questions about commercial real estate? Contact Schecter Law Attorneys At Law Today.
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The Fort Lauderdale real estate attorneys at Schecter Law have represented buyers, sellers, brokers and developers in connection with the acquisition, development, and sales of commercial properties since 1976. The real estate industry in South Florida is fraught with potential land mines that only seasoned real estate attorneys are equipped to successfully navigate. Our attorneys will represent the client throughout the entire real property transaction, from review and drafting of the purchase and sale agreement through the providing of title insurance.