Articles Tagged with commercial real estate

Commercial real estate is property being operated to generate business revenue through rental income or capital gains. Because it is meant to generate revenue if it is residential property, it must be used as rental housing to still be considered commercial real estate. It is not personal property. 

Commercial real estate may have multiple uses, like stores and offices or stores and residential property. Under California’s Civil Code, commercial real estate is treated separately from residential real estate. Commercial real estate buyers are presumed to be more experienced and sophisticated in their transactions. This is also because they are usually represented by an agent or broker who represents only their interests. (Easton v. Strassburger (1984) 152 Cal.App.3d 90, 103 fn 8.) Generally, a seller via their broker is required to disclose all facts materially affecting the value or desirability of the property to the purchaser (Civ. Code, § 2079.) This is called the transfer disclosure law. However, this only applies buildings with four or fewer dwellings, so the “transfer disclosure law” usually does not apply to commercial real estate. 

With mixed use properties it may apply depending on the “sophistication” of the buyer. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1189–1190.) There is less protection for commercial tenants, like businesses occupying commercial real estate. Commercial tenants are considered to be “differently situated” than residential tenants. (Civ. Code, § 1993.04) Commercial tenants are more likely to have resources if the need arises to vacate the rental premises.