Commercial real estate transactions are often high-stakes—financially, contractually, and legally. Whether you’re buying, leasing, or developing a property in Indiana, even small oversights can result in expensive delays, liabilities, or lawsuits.
At Annie Scott Realty Group LLC, I approach every deal with a risk-aware mindset. I don’t just help you find the right space—I help you navigate the legal complexities that come with it. Here are some of the most common legal pitfalls in commercial real estate—and how I work to avoid them.
1. Zoning Conflicts and Permitted Use Issues
The Pitfall:
Assuming the property can be used for your intended business without confirming current zoning, conditional uses, or variance requirements.
How I Avoid It:
I perform a full zoning and land use check early in the process. If there’s any ambiguity, I coordinate with local planning departments or zoning attorneys to verify what’s allowed—and what’s not. I also check for any pending changes to local ordinances or nearby development that could impact use.
2. Overlooking Environmental Liability
The Pitfall:
Purchasing a property that comes with hidden contamination issues—or prior industrial use that exposes you to future environmental claims.
How I Avoid It:
I recommend and help coordinate Phase I Environmental Site Assessments on every applicable deal. If issues are found, we bring in environmental consultants to determine next steps, including potential cleanup or insurance-backed remediation protections.
3. Inadequate Lease Review
The Pitfall:
Overlooking key clauses in commercial leases that shift financial risk or limit your options—like unclear CAM charges, vague maintenance obligations, or one-sided renewal rights.
How I Avoid It:
I review lease terms with both the client and a trusted commercial real estate attorney. I flag red flags such as:
- Hidden pass-through costs
- Lack of subletting flexibility
- Ambiguity in repair obligations
- Unfair default or early termination clauses
Then I help negotiate revisions that reflect your operational and financial goals.
4. Title Defects or Boundary Disputes
The Pitfall:
Closing on a property only to discover an easement, lien, or access dispute you didn’t anticipate.
How I Avoid It:
Every deal includes a comprehensive title search and boundary survey. I work closely with title companies to review:
- Liens or unpaid taxes
- Encroachments
- Shared driveways or easements
- Access issues for landlocked parcels
I also ensure clients purchase owner’s title insurance for added protection.
5. Misunderstanding Property Condition and Code Compliance
The Pitfall:
Buying a property that looks great on the surface—but hides major deferred maintenance or fails to meet ADA or fire code standards.
How I Avoid It:
I coordinate licensed commercial inspections to evaluate systems, structure, code compliance, and accessibility. For older or converted buildings, I also check with local authorities on grandfathered uses and what may trigger mandatory upgrades.
6. Ambiguities in Purchase Agreements
The Pitfall:
Using vague or outdated contracts that don’t properly define terms like contingencies, inspection timelines, or seller obligations.
How I Avoid It:
I use vetted, Indiana-specific commercial contracts and ensure that every offer includes:
- Clear due diligence periods
- Defined closing costs and prorations
- Escrow instructions
- Contingencies that protect your earnest money
If the deal is complex (e.g., a portfolio sale or development site), I bring in legal counsel early to structure the transaction carefully.
7. Failing to Align with Local Ordinances and Incentives
The Pitfall:
Overlooking local approval processes or missing out on economic incentives tied to tax abatements or redevelopment districts.
How I Avoid It:
I stay up-to-date on Indiana’s local incentive programs, tax increment financing (TIF) zones, and economic development grants—particularly in places like Westfield, Noblesville, Greenfield, and Zionsville. I connect clients with city staff or local EDCs when incentives are available.
Final Thoughts
In commercial real estate, legal risks are real—but they’re manageable with the right guidance and diligence. My role is not just to connect you with the right property, but to protect your investment at every stage—from contract to closing.
At Annie Scott Realty Group LLC, I collaborate with experienced attorneys, inspectors, title officers, and local officials to help clients avoid costly missteps and move forward with confidence.
Have questions about buying or leasing commercial property in Indiana? Let’s talk about how to move forward wisely and legally secure.
Photo Credit: Luxury Presence
Sources:
- Indiana Commercial Board of Realtors
- American Bar Association – Real Property Section
- CCIM Institute – Legal Due Diligence Best Practices
- Environmental Protection Agency (EPA) – CERCLA and Phase I Guidelines
