If you own or are considering buying a commercial space in Minnesota, you’ll want to thoroughly review all the laws that may be relevant to the transaction. Whether you’re purchasing land or land with a building on it to house a business, keep in mind that there are many government regulations that can have a significant impact on your real estate interests.
Various issues can affect your business and the land it sits on. Some government regulations include zoning laws, rules for land usage or issues regarding tenant rights. There may also be building codes to which you must comply if you are purchasing land and plan to erect a structure on it.
Hazardous materials and other possible real estate issues
Depending on what type of business you plan to open, you might encounter government regulations regarding environmental safety. For example, if you buy commercial space with the intention of opening a dry-cleaning business, environmental laws will be relevant in your case. Issues like toxins released into the air or hazardous materials present in the workplace are top priorities for someone who owns a dry cleaner shop.
Taxes, taxes, taxes
In addition to zoning laws, land use regulations and environmental issues, when you purchase commercial space, you’ll be dealing with several tax regulations as well. Certain issues may even have a significant impact on your initial real estate investment, such as capital gains tax or state transfer taxes. Tax issues can be complex, especially if you are part of a real estate investment with other investors.
There are ways for commercial property owners to alleviate their tax burdens. Keep in mind that tax debt can affect profitability. Therefore, it is beneficial to learn as much as you can regarding ways to minimize your tax burden.
Know what you’re getting into
It’s best to seek guidance ahead of time and to perform due diligence in researching Minnesota commercial real estate laws, as well as federal government regulations. Government regulations can affect both developers and real estate investors. Ordinances regarding zoning issues can influence commercial real estate development projects. Both design issues and use of land or property can cause complications or delays with projects or transactions.
Researching the market and understanding possible risks associated with a commercial real estate space increases your chances of success and minimizes the likelihood of legal problems. If such problems arise, however, it is always best to act swiftly to secure experienced guidance and support because non-compliance of zoning laws or other regulations can result in substantial fines, citations or other serious issues.