Buying commercial real estate is a significant investment for any business. Before you complete the transaction, it is imperative you ensure the property is in good condition and well-suited for your company’s needs and objectives.
No one wants to be surprised by undisclosed defects that will need costly, sometimes immediate repairs. This raises an important question: To what extent do commercial property sellers have a duty to disclose defects in Illinois? Here, our Chicago, IL commercial real estate lawyers provide an overview of a commercial real estate seller’s duty to disclose.
Commercial Real Estate is Not Covered by the Illinois Property Disclosure Statute
Enacted in 1998, the Illinois Residential Real Property Disclosure Act is one of the strongest real estate disclosure laws in the country. Among other things, it requires property sellers to make in-depth disclosures — including completing a form, which contains more than 20 specific questions regarding the condition of the property. However, this statute does not apply to commercial real estate transactions or commercial real estate development projects. If you or your company is purchasing commercial real estate in Illinois, you are not protected by this law.
Legal Rights and Remedies Arise Out of the Purchase Agreement
Although the Illinois property disclosure statute does not apply to commercial real estate transactions, that does not mean buyers are completely without legal protection. Quite the contrary, there is still several things buyers can do to ensure disclosure from property sellers. As a commercial buyer, your legal rights and your legal remedies will arise largely out of your purchase agreement and the direct representations made by the seller.
In other words, commercial real estate buyers need to be proactive when reviewing and negotiating purchase agreements. Illinois does not require commercial property sellers to complete a mandatory commercial disclosure form. Still, a commercial seller cannot commit fraud. If they lie or materially mislead the buyer, they can still be held liable for fraud or breach of contract. Beyond that, a commercial real estate buyer can absolutely ask specific questions and request the seller make specific disclosures before agreeing to buy the property.
The Importance of Due Diligence
As a commercial real estate purchase in Illinois is not as strictly regulated as a residential property sale, it is imperative buyers perform proper due diligence before completing the transaction. Before you or your business completes a transaction, make sure the property is carefully inspected. Further, you should work with an experienced attorney who can help you craft a commercial real estate agreement, which effectively protects your legal rights and financial interests – should the seller fail to disclose a material defect.
Call Our Cook County, IL Commercial Real Estate Attorneys Today
At North Suburban Legal Services LLC, our Illinois commercial real estate lawyers are skilled, effective advocates for individuals and businesses. If you suffered damages as a result of a seller’s duty to disclose a property defect, we can help. Contact us today at (312) 313-4038 for a free consultation. With an office in Chicago, our attorneys serve communities throughout the region, including in Schaumburg, Evanston, Joliet and Naperville.