Commercial Real Estate Law

Commercial real estate law in the U.S. can be quite complicated because it is regulated by federal laws as well as state laws. Moreover, parts of the contract law also apply, thus further complicating real estate transactions.

Aspects of commercial real estate law

  • Rights and interests in the real estate
  • Transfer of real estate including sales and purchase
  • Landlord and tenant issues
  • Title to the real estate
  • Tenant rights

Components of real estate transactions

Listing agreement

Sellers of real estate appoint brokers to act as their agents and find a suitable buyer for their property. Accordingly, the seller and the broker enter into a contract which is known as the listing agreement. According to commercial real estate law, this contract might be open or exclusive. In an open contract, the seller pays commission to the broker only if the latter finds a buyer for the real estate piece. If the seller appoints only one broker, then it is called an exclusive agreement. In such a case, the seller has to pay a commission to the broker even if he sells the property to a person who was not referred by the broker. These issues are governed by the general principles of contract law. Also, according to the Statute of Frauds, real estate contracts should always be in writing.


People who wish to operate as real estate brokers in any state, have to obtain a license under state laws. Operating without a license is illegal.

Federal Fair Housing Act

The commercial real estate law prohibits discrimination, especially by real estate brokers, on the basis of race, color, sex etc in real estate transactions.

Property title

The seller should have clear title to the property he is selling and any third party should not have interest in the same.

Property deed

For transferring of title, a property deed - complete with the description of the property - should be executed. A few U.S. states have made it mandatory under commercial real estate law, that such deeds should be officially recorded.


Financing of commercial real estate transactions generally take place by way of mortgage. Hence mortgage transactions also come within the ambit of commercial real estate law.

As you can see, real estate issues can be quite complicated. So, appointing a lawyer well versed in commercial real estate law is advisable.

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