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Jenkins Fenstermaker, PLLC

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Huntington, WV 25701-2225

Phone (304) 523-2100

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By Jenkins Fenstermaker PLLC Of Jenkins Fenstermaker, PLLC on 03/19/2021
WV Commercial Real Estate Closings: A Brief Overview

When considering a commercial property purchase, it’s important to understand how WV commercial real estate closings affect your legal rights and business interests. Commercial property transactions are especially complicated because they may involve multiple parties, various legal entities, liability concerns, and large sums of money.

A qualified WV commercial real estate attorney can guide you through the initial stages, request and prepare all documents correctly, assist with due diligence, and protect you throughout the transaction.

Successfully Navigating WV Commercial Real Estate Closings

Unlike simple residential property transfers, WV commercial real estate closings involve complex and often opposing tensions between the buyer and the seller. For example:

  • The buyer may want to retain the right to cancel for as long as possible, while the seller wants to bind the buyer as quickly as possible.
  • The buyer may want to add contingencies, but the seller wants an airtight agreement long before closing.
  • The buyer may want to hold the seller responsible for future issues, while the seller wants to walk away free from all future liabilities.

Since commercial real estate transactions in West Virginia are not governed by federal laws, the parties have the flexibility to create customized documents and contracts to produce a mutually satisfying closing often through extensive negotiation.

Due Diligence When Preparing for a Commercial Real Estate Closing

The best way to protect your interests, whether you are the buyer or the seller, is to perform extensive due diligence to unearth any potential problems that might arise before or after closing.

As the buyer, you should perform all of the following:

  • Have a lawyer review and analyze the current state of record title to the property for liens, judgments, tax issues, and more.
  • Review a current survey to ensure no encroachments, zoning issues, or setback violations and consider obtaining your own survey.
  • Request and review relevant environmental reports.
  • Request and review tenant agreements.
  • Perform relevant UCC searches.
  • Ensure the sale agreement contains your desired provisions.
  • Ensure the seller is legally authorized to sign documents and sell the property.
  • Review the seller’s financial statements.

The seller’s due diligence requirements should include performing the following:

  • Review the buyer’s title report and respond to any objections or exceptions.
  • Review the property survey and address any encroachments or zoning violations.
  • Provide proof that the contract signer has the legal ability to sign on behalf of the seller.
  • Ensure the sale contract is properly prepared and executed.
  • Verify the down payment funds have been received by the escrow agent and placed in a separate account.
  • Prepare and execute any lease terminations or notifications as required by the sale agreement.

WV Commercial Real Estate Closing Costs—Who Pays What?

In all commercial real estate transactions in WV, the parties can expect certain closing costs. Unless agreed otherwise, the seller is usually obligated to pay the transfer privilege tax. Real estate taxes and utilities are normally prorated as of the closing date, and the buyer assumes the cost for the title insurance policy.

The buyer usually pays all fees for recording documents that protect his or her rights, such as the deed, transfer documents, and releases. The seller is responsible for paying recording fees for documents such as a release of mortgage or other proof that the seller’s obligations have been satisfied. Miscellaneous closing expenses, settlement fees, and attorney’s fees are paid by the party that received the service.

Also, special WV income tax rules apply to non-residents who sell property within West Virginia. These rules require the withholding of income tax from property sales involving non-West Virginia residents.

The Benefits of Having an Attorney for WV Commercial Real Estate Closings

From start to finish, commercial real estate transactions in WV can be extremely complicated. With so much at stake, it’s important to work with a qualified and experienced WV commercial real estate attorney. Your attorney will investigate, negotiate, and supervise the entire transaction while protecting your legal rights.

Before the closing, your lawyer will ensure all necessary provisions are included in the sale contract. After the closing, he or she will verify that closing documents are recorded, liens released, leases assigned, tenants notified, and liability is shifted as required by the terms of the contract.

When the stakes are high, you can trust Jenkins Fenstermaker, PLLC to handle your WV commercial real estate closings. Allison J. Farrell is a top Clarksburg, WV commercial real estate attorney with extensive commercial property experience. Call Allison today at (304) 521-6120 or fill out our easy contact form to schedule an appointment and receive the legal skill and attention you deserve.