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Home»Travel»Risks when buying commercial real estate

Risks when buying commercial real estate

November 22, 2018

As you know, the risks are inherent in any type of activity, and the commercial real estate market cannot be considered an exception. Of course, it has the same rules as in other markets, there are the same macroeconomic risks, but there are also the nuances inherent only in this type of activity. For example, in the conditions of the Russian commercial real estate market, mobile buildings deserve special mention. These are mainly container or preferential objects, which in the shortest possible time can be dismantled and taken away. The very ease of such dismantling is a risk. Theoretically, there is nothing particularly in such transactions. Typically, we are talking about trading pavilions, and in any agency, on any specialized site there are many proposals of such real estate. However, before entering into an agreement, you should check who is the owner of the land on which this object stands. If you are not dealing with the owner, but with the tenant, then the risk that one day you bought will be asked to remove, and you will not receive any compensation for this. Well, if you are interested in magnificent fishing in Astrakhan on Akhtuba. Only there is everything to get great pleasure from fishing. The fact is that most often the land for such pavilions is leased by local authorities. Entrepreneurs are erecting kiosks, bistro, trading pavilions in such areas. Each object can change several owners, and such a process can last decades. But once the city may have a need for this earth. How it was, for example, in preparation for the Olympics in Sochi. Under the law, the city authorities have the full right to demolish non -capital objects for the construction of infrastructure. Of course, you can try to re -register such a pavilion into the capital construction object, but this can only be done through the court, which, in most cases, will be on the side of local authorities – and from a legal point of view, this is quite fair. The advantages are received by those who were able to reissue real estate into the capital construction object even when concluding a contract of sale. Another risk that should be mentioned is the availability of encumbrances (this is mainly concerns real estate under the pledge of loan agreements – if the transaction is not properly executed, the buyer will have to pay on a loan).

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