Are you currently seeking some more in depth knowledge about the differences between commercial vs real estate law in Florida? This is an important topic because it grasps various issues regarding property rights, purchases, and more surrounding real estate in Florida.
During these unprecedented times, you must be fully aware about the legal implications when investing in commercial property and real estate. You also must differentiate the legal standards between them so that you can lessen the possibility of financial risks down the road. For these reasons, we urge you to join us throughout this detailed account.
Legal standard of real estate law
Real estate law defines the right of allowing anybody being able to live on a specific area of land. It also dictates who can govern it, and what type of use it can have. Real estate also mandates which land can be bought or sold. And, therefore, it dictates the specific price to be set on the land.
Furthermore, since actual land normally holds a high monetary value, real estate laws work together with state laws in order to ensure valid and monitored transactions.
Following terms in relation to real estate law include:
- Title – word defining the official owner of the land.
- Mortgage – describes the price amount of the house. In mortgage, the homeowner is obliged to give the bank partial ownership of the house as a bond or pledge.
- In a foreclosure, the property owner will be forced to give up the rights of the house back to the bank or lender if they fail to pay the mortgage.
- Closing – refers to an official meeting in which the real estate ownership is transferred over.
- Escrow – is defined as money or property held by a third party or disinterested party for safekeeping.
Commercial estate law
Commercial real estate dictates the transfer and sale of any property that is intended for use of business. The vast majority of commercial real estate lawsuits deal with disputes over the purchase or sale of property for commercial purposes. Further premises of commercial real estate law also cover other topics that range from commercial property lease, land use, and zoning issues.
As an example, the majority of state and local laws do not allow business related actions to occur within residential areas. For that reason, commercial real estate laws also control a specific property’s use.
Commercial property legal issues
- Instances of property taxes: These types of taxes tend to be higher than most residential property taxes, and the value depends on the type of business operating on the property
- Insurance: One of the biggest legal issues that businesses deal with are with commercial insurance disputes. Depending on risk factors, safety codes, and property tax, insurance plays a big role here.
- Ownership disputes: The majority of businesses are constantly faced with ownership, titles, and leasing disputes over commercial property.
- Boundary disputes: At times, commercial property may be subject to legal disputes because of infringement of physical boundaries surrounding the property. Similarly, they may also arise if sections of the property end up extending onto another neighboring area.
Residential estate law
Residential real estate is defined as the use of land that it meant to host either new construction or resale homes. Statistically speaking, one of the most common categories of constructions are single-family homes. Similarly, residential real estate also labels condominiums, townhouses, high-value homes, and even vacation homes.
Residential property legal issues
Most legal disputes regarding residential property mainly arise because of the amount of money that revolves around buying or building homes. If there is a seller with an emotional attachment to the property, this will be reflected on the property’s price. The issue arrives when the real marketed price is given based on the property’s conditions. Due to the attachment, the seller will most likely disagree with the mandated price, and make the transaction very difficult for the buyer.
Let’s go ahead and review other possible contingencies:
- Coding liability and zonal infringements,
- Mortgage issues,
- Disagreements at the time of the closing,
- Failure to uphold disclosure agreements.
Differences between commercial and residential real estate
Now that we have reviewed the details within both types of real estate, lets review the differences between them.
Residential real estate emcompasses the grand majority of single family homes, as well as some rental residences. On the other hand, commercial property is an instance with five or more units. Duplexes, quadruplexes, and condos form part of residential real estates; while offices, retail, industrial, hotels, are considered to be commercial real estate.
A second difference between residential and commercial properties relies on the form in which the tenant attracts the landlord. By this we mean that commercial properties are usually leased to businesses meant for profit. Differently, residential properties tend to be rented to families or individuals with a steady monetary income.
Furthermore, each form of property arrives with different sets of lucrative chances. For that reason, commercial real estate usually provides possible investors with a larger range of hypothetical investment. In other words and on average, there are more commercial property investment funds in comparison to residential types. On the other hand, residential real estate gives investors a bigger role in the handling of the property.
Other differences between these two types of real estate include the following:
- Legal protections: Unlike commercial tenants, residential tenants in the State of Florida are provided with more extensive legal assurances. This is because the property will be intended for day to day living. Furthermore, these protections are in place due to the amount of legalities that deal with residential property. Therefore, these guidelines will prevent the landlord from executing any unfair practices against the residential tenant.
- Contract length: When talking about residential property, these contracts usually run on a yearly basis. However, commercial property contracts ask for a minimum of 3 to 5 years.
- Repairs and maintenance: Commercial property tenants have way more responsibility with the property if something goes wrong or needs immediate repair. They have to maintain safety codes, standards of health, and general maintenance. On the contrary, residential tenants don’t need to worry about the building’s maintenance. If something goes wrong, and it wasn’t their fault, they will have to get in contact with the landlord. In this case, the landlord is responsible for making the necessary corrections.
The information throughout this article was given to you so that you can gain the necessary insight between both types of real estate. Whether you want to start your own business, rent, or buy a home, certain legalities will be implied at the time of submitting the transaction.
Truth be told, it isn’t an easy task. The good news is, however, that there’s a team ready to guide you throughout your whole process. One that understands the complexities of commercial vs residential real estate law in Florida and will make sure that your rights as a landlord or tenant are respected. Legal representation is crucial for these events. Don’t hesitate to call us now!