This is the next post in a series of articles discussing the importance of real estate counsel in commercial transactions and investment property purchases in Tacoma or Olympia, Washington. My previous post discussed the role of knowledgeable real property counsel in coordinating the various interested parties involved in a transaction. Understanding the role of each and the impact they may have on a transaction is an essential part of navigating the deal process. This post will address the closing, or completion, of a commercial property transaction or investment property purchase. Given the complex nature and specific legal requirements for real estate contracts and documentation, it is essential to involve an attorney with experience in this area. If you are involved in the sale, purchase or lease of real estate, contact my office today to speak with a lawyer.
Many people are familiar with the concept of a real estate closing in the personal residential property context. Typically, these involve the buyer and seller visiting an escrow office to sign a pile of documents, often very quickly and without reading them. A closing for a commercial property transaction can be significantly more complicated and should proceed more carefully. Certainly, nothing should be signed until you have read it and have received answers to any questions you have about it. Depending upon the nature of the transaction, investment and commercial transactions usually have additional requirements and levels of complexity. For example, unlike personal residential property sales, parties to commercial transactions are often business entities. An attorney will verify that the transaction was approved by the necessary corporate actions, such as at a shareholders’ meeting or by other corporate actions. In addition, the attorney will verify that the individual signing documents on behalf of the business entity has the appropriate authority to sign and bind the company. Without the requisite approvals and authority, a business entity may argue that the transaction was never binding.
The mechanics of a closing may also be complicated. The size and structure of a transaction will dictate the types and amount of documentation required to finalize the sale. The attorney will prepare and organize each of the documents for execution. Customary documentation, such as deeds and easements, will be prepared and notarized by a notary public for recording with the county records. Other documentation may include escrow release instructions, wire instructions for the bank, assignments of leases and rents, estoppel certifications for existing tenants, among others. Whether the closing is at a specified location or being handled remotely, the lawyer will collect the necessary signatures and certifications to complete the transaction.
Given the amount of documentation and the details surrounding a closing, one can imagine how items may be overlooked as part of a closing. Even the smallest detail, if not handled properly, can interrupt or delay finalizing a deal. I cannot overemphasize the importance of engaging an experienced real estate attorney to handle your closing smoothly and professionally. My Olympia firm has experience in commercial real estate transactions and the closing process. If you need assistance, contact my office today to speak with a lawyer. The firm also services the Thurston County cities of Lacey, Tumwater, and Yelm, the Pierce County cities of Tacoma, Puyallup, and Lakewood, the Lewis County cities of Centralia, and Chehalis, the King County cities of Seattle, Auburn, Bellevue, Burien, and Federal Way, as well as other areas in Washington, including Grays Harbor, Mason, Cowlitz, and Pacific Counties.