Do you need a different license to practice commercial real estate?
Is “Agency Disclosure” required in commercial real estate?
What makes a CIE (commercial information exchange) different than an MLS (multiple listing service)?
A: On a CIE: 1) there is no offer/guarantee of commission 2) there is no requirement to add a listing 3) sale/lease disclosure is not required 4) member data is fully available to the public and the public can search.
What is CPIX.net?
A CIE (commercial information exchange).
Can residential refer to a commercial agent?
A: Yes. Any referral fees paid are based on negotiation between the two agents.
Do commercial agents have to follow the “Code of Ethics”?
Yes, but only if they are “REALTORS®.” The Code of Ethics is based on REALTOR® membership, not state licensing.
Are education requirements different in commercial?
A: Not to the state as far as the type or amount of education. CBOR highly recommends commercial-focused education to all practitioners that want to focus on commercial.
What is the deadline for filing a Petition in the Michigan Tax Tribunal to appeal the assessment on a commercial or industrial property?
May 31 of the year appealed.
Must an owner of commercial or industrial property appeal to the Board of Review in order to have the opportunity to obtain a reduction in the property’s assessed value?
No; the prerequisite of first appealing to the Board of Review applies only to residential properties.
Is an apartment building considered to be commercial property or residential property?
A: An apartment building is considered commercial property if it has more than 4 units; otherwise, it is deemed residential property.
Is a mobile home park commercial property or residential property?
Why should I recommend to my client to retain a lawyer?
A: To make sure your client — to whom you owe a fiduciary duty — is properly protected and can best identify and manage legal risk.
What if the lawyer tries to kill the deal?
A: A good lawyer will try not to kill the deal. A good lawyer will help a buyer to identify potential problems, and work to solve those problems in a reasonable, cost efficient manner so the deal can proceed to closing. If problems exist, then most often it’s in your and your client’s best interests to identify and solve the problems before closing.
What if the lawyer is not a team player, and tries to exclude the broker and take over the transaction?
A: A good lawyer is a team player, and recognizes the strengths that all parties, especially the broker, bring to the table. Communication is key. Either the lawyer or the broker can help quarterback the transaction. It is important for them to communicate frequently with each other. They should work together to determine what needs to be done, by whom, and by when, so the client’s interests are properly protected in accordance with any signed agreements.
Does the lawyer need to review all documents before they are signed?
Yes. The lawyer might be able to spot hidden risks, or opportunities. The lawyer can draft or revise the document to maximize the client’s best interests, without necessarily slowing down or killing the transaction.
What if the property I want to buy is contaminated?
A: You may purchase a contaminated piece of property in the state of Michigan without assuming responsibility to clean it up if you complete proper environmental due diligence at the time of the sale. Due diligence generally consists of the following steps:
1) All Appropriate Inquiry (AAI) starting with a Phase I Environmental Site Assessment (ESA) used to identify RECs on property.
2) If a REC is identified, sufficient sampling and analysis of soils and/or water must be conducted to confirm the property is contaminated or a “facility.”
3) A Baseline Environmental Assessment (BEA) report is submitted to the state that documents the AAI process and pre-existing contamination.
4) Complete a Due Care Plan that shows the property is safe for the intended use.
While not required for a statutorily-complete BEA, sampling all areas of concern as identified in a Phase I ESA and providing a means to distinguish a potential new release associated with future operations from an old one, may be a good business decision for future liability protection and to demonstrate compliance with Due Care.
What if my Phase I ESA identifies a concern or “recognized environmental condition” (REC) on a property?
A: A Phase II ESA is typically recommended where sampling of soil and/or water is conducted to determine if the concern identified in the Phase I ESA has impacted the property, thus representing a potential liability or health exposure risk.
Do Phase I ESAs document whether there are wetlands or asbestos issues at a property?
A: Wetlands, asbestos, lead paint, mold, and radon are examples of “non-scope” items and are not included as part of a standard Phase I ESA. Not everyone wants these items addressed in a Phase I ESA.
Be sure to read your proposal carefully and discuss your needs with your environmental consultant and attorney.
What is the lifespan of a Phase I ESA?
A: A Phase I ESA is good for 180 days, after which it can be updated if less than one year old. A new Phase I ESA is required if the old report is greater than one year old.
Do I have to do an environmental assessment when buying a commercial or industrial property?
A: No, but if you do not document the environmental condition of the property or conduct “all appropriate inquiry” (AAI) at the time of purchase, you risk assuming significant cleanup liability for any pre-existing contamination.
Completing a Phase I Environmental Assessment (ESA) is standard industry practice for commercial property transactions. Most lending institutions will require an environmental assessment be completed prior to providing funding on real estate.
What is a Due Care Plan?
A: A Due Care Plan (DCP) is a report that discusses the nature of the on-site contamination and how occupants/visitors of the property will not be exposed to an unacceptable health risk. For example, ground water may be contaminated but since the site is connected to the municipal water supply the contaminated groundwater does not pose an unacceptable health risk. An owner of a contaminated property is required to have a DCP.
Do I have to send my Due Care report to the State?
A: No, unless the state requests a copy. You can request that the state review your DCP for adequacy. The review process typically takes less than 45 days.