Commercial real estate law in Florida can be complex. Property transactions, zoning regulations, legal paperwork, taxes and other related matters that can be challenging for investors, developers, and business owners. When property owners or buyers partner with the right Florida real estate attorney, they can ensure that their best interests are taken into account when dealing with property-related matters.

Below are some of the most common legal issues faced by property owners in Florida.

Zoning Regulations

One of the foundational aspects of commercial real estate in Florida is zoning regulations. These guidelines dictate how land can be used in different areas, ranging from residential to commercial and industrial. Understanding the specific zoning regulations in a particular location is crucial for anyone looking to invest in or develop commercial properties. The state’s zoning laws are designed to ensure orderly growth and protect the interests of both property owners and the community.

Land Use Planning

Florida places a strong emphasis on comprehensive land use planning. This involves creating a vision for the development and use of land within a specific area. Local governments are tasked with developing comprehensive plans that address issues such as transportation, housing, and environmental conservation. Investors and developers must align their projects with these plans to ensure compliance and avoid potential legal hurdles.

Environmental Considerations

Commercial real estate projects in Florida often face scrutiny regarding environmental concerns. The state’s unique ecosystem requires careful consideration of the impact that developments may have on the environment. Environmental impact assessments and permits may be required, especially for projects situated near sensitive areas like wetlands or coastal zones. Some local jurisdictions in Florida may impose environmental impact fees on certain commercial developments. Owners could benefit from being aware of any such fees in their area. Ensuring compliance with environmental regulations is not only a legal necessity but also crucial for maintaining sustainable and responsible development practices.

Title and Due Diligence Issues

Title issues can pose significant challenges in commercial real estate transactions. Conducting thorough due diligence to identify and address any potential title problems is essential. Title insurance is commonly used to protect buyers and lenders against any unforeseen issues that may arise. This step in the process helps mitigate legal risks and ensures a smooth transfer of ownership.

“Title issues can pose significant challenges in commercial real estate transactions.”

Contractual Agreements

Commercial real estate transactions involve a myriad of contractual agreements. Purchase and sale agreements, leases, and financing contracts are just a few examples. Understanding the terms and conditions of these agreements is crucial for all parties involved. Legal assistance is often sought to draft, review, and negotiate these contracts to protect the interests of buyers, sellers, landlords, and tenants.

Tax-Related Matters

Commercial property owners in Florida should be aware of various tax considerations that can impact their financial planning and compliance. Here are key tax issues for commercial property owners in the state:

Property Taxes:

Similar to residential properties, commercial properties in Florida are subject to property taxes. The amount is based on the assessed value of the property, and tax rates vary by county. It’s crucial for commercial property owners to understand the local rates and their property’s assessed value.

Tangible Personal Property Tax:

Business owners with tangible personal property used in their commercial activities may be subject to the Tangible Personal Property Tax. This includes assets such as furniture, equipment, and machinery. Owners should accurately report these assets to the county property appraiser’s office. Florida offers an exemption for certain tangible personal property used for business purposes. Commercial property owners should be aware of the eligibility criteria and ensure they apply for the exemption if applicable.

Tourist Development Tax (Bed Tax):

If commercial properties, such as hotels or vacation rentals, are rented out for short-term stays, owners may be subject to the Tourist Development Tax, commonly known as “the bed tax”. Compliance with collecting and remitting this tax is essential.

Renewable Energy Property Tax Exemption:

Florida provides a property tax exemption for certain renewable energy source devices installed on commercial properties. Owners investing in solar or other qualifying renewable energy systems may be eligible for this exemption.

Revolving Loan Fund Exemption:

Commercial properties participating in a local government’s approved revolving loan fund program may qualify for a property tax exemption. This incentive is designed to encourage environmental remediation and revitalization efforts.

Community Redevelopment Area (CRA) Tax Increment Financing:

In designated CRAs, tax increment financing may be in place, where a portion of the increased property tax revenue resulting from improvements is allocated for further redevelopment. Commercial property owners should be aware of any CRAs in their area.

Impact of Lease Structures:

The structure of commercial leases can have tax implications. Owners should be mindful of lease agreements, including considerations like pass-through expenses and how they impact property tax responsibilities.

1031 Exchange for Capital Gains Deferral:

Commercial property owners looking to sell may consider a 1031 exchange, allowing them to defer capital gains taxes by reinvesting the proceeds in like-kind property. Proper planning and compliance with IRS regulations are crucial for a successful exchange.

The Importance of an Attorney

Working through the legal issues that can occur while owning or attempting to buy Florida commercial real estate may require the support of a qualified Florida real estate attorney with experience in commercial matters. Having an attorney to support property transactions and day-to-day ownership-related issues can help make addressing zoning challenges, contractual disputes, financing issues, and other complexities much easier.

With professional legal counsel, stakeholders can ensure matters are handled smoothly, efficiently and in a way that supports their best interest.

South Florida Law

At South Florida Law, we are committed to helping our clients manage real estate and close real estate transactions of all types within the state of Florida. We help companies and their landlords come to agreements that work best for their business interests. We have the big firm resources to dedicate the time and effort where it is needed. At the same time, we provide personalized service and attention to detail in your case at a price point that can only be achieved with a firm of our size. Are you a property owner or looking to buy in Miami, the Keys, Broward or Palm Beach County? You’ll need an experienced Florida real estate attorney you can rely on. Call South Florida Law today on (954) 900-8885 or reach out to us via our contact form.