The commercial purchase and sale agreement is similar to the residential purchase and sale agreement in that they often include the transfer of real estate, but differ in that they also often include the transfer of business equipment, trade-names, trademarks, intellectual property, goodwill, non-competition agreements, and other business assets. At Ballou Law we are able to draft or review your commercial purchase and sale agreement and make sure your interests are protected.

When purchasing a business, the term due diligence refers to the period of time during which buyers are provided with an opportunity to investigate the business or property and often includes:

• Reviewing employee wages and salaries of the prospective business

• Examining a company’s books and records, including accounts receivable, inventories, and debt

• Reviewing company contacts

• Reviewing the company’s marketing and sales

• Physically inspecting all property and equipment

• Thoroughly examining all relevant leases and deeds.

On occasion, due diligence will disclose issues that must be included in any negotiations.

The title search is the process determining whether the commercial property you are buying is actually owned by the seller, whether there are any mortgages or other liens against the commercial property or whether there are any restrictions on the commercial property that may affect your use and enjoyment of the commercial property. The title search is conducted by searching records in the Registry of Deeds. The records pertaining to the property are then reviewed by our attorney.

Because the title search is such a critical part of the commercial real estate transaction, under Maine Law, you are allowed to choose your own title attorney without additional expense to you even if your mortgage lender would prefer to use another attorney or title company to handle the closing.

When purchasing a business it is also important to conduct a search with the Maine Secretary of State to ensure the business entity is in good standing and business assets being purchased are free and clear of liens.

Title insurance is an insured statement of the condition of your title or ownership rights to the commercial property you are buying. Title insurance guarantees that you own the commercial property that you purchase. It protects you from from unreported title defects.

As agents for the First American Title Company, we believe strongly that title insurance is the best protection against title defects and other title challenges to your commercial real estate. We believe this because we have seen first hand how our clients have benefited from First American’s insurance protection. If insured, First American will defend your title in the courts at its own expense and will pay to correct or clear the title when possible or pay you for the loss. This is the reason banks will not lend money without title insurance - they know exactly how important it is. First American offers price incentives to buyers/owners seeking coverage concurrently with mortgage financing.

Cities and towns adopt zoning and land use ordinances to protect real estate values, to provide for the orderly use of land in a community, and to promote safety and community planning. Zoning and land use ordinances are sometimes unclear or ambiguous and require legal interpretation. Occasionally, clients need variances, or municipal relief from the hardships caused by strict application of ordinances. Another common situation where legal advice can be useful occurs when a municipal building permit or use permit is denied and it appears that the decision maker, often a code enforcement officer, has made a mistake in the interpretation or application of an ordinance provision. In this situation, an appeal may be filed with the municipalities’ board of appeals, and if unsuccessful, an appeal to superior court. At Ballou Law, we have the knowledge, experience, and skill to provide you with advice or representation in land use and zoning to guide you through the process of applying for variances or review of an unfavorable municipal decision and give you the best chance of success in achieving your real estate development or business goals.

In order to operate certain businesses, special permits or licenses may be required, including for example, state liquor licensing or local medical and recreational marijuana sales permitting. The success of a business may turn on whether such permits and licenses can be obtained. At Ballou Law, we have experience with land use, hospitality and innkeeper industry licensing and permitting and can guide you through the process or represent you in presenting the applications to government agencies.

Section 1031 refers to a wonderful provision of the Internal Revenue Code that allows a seller of investment real estate, who would otherwise have a taxable gain, to defer payment of that tax by reinvesting the sales proceeds in the purchase of another investment property. The income tax is deferred until the replacement property is sold for a gain without utilizing Section 1031. The reference to like-kind exchange relates to the requirement that the property sold and the property purchased must be similar in nature, for example, investment real estate exchanged or sold and replaced by the purchase of other investment real estate, usually of equal or greater value than the property sold. These transactions require careful attention to compliance with the provisions of the Code, including the appointment of a qualified intermediary, a person or firm that holds the net sale proceeds from the sale until the funds are used for the purchase of the replacement property. The investor’s attorney cannot serve as the qualified intermediary, but we regularly work with firms that provide that do an excellent job of providing that service and we can arrange this service on your behalf.

This is a real opportunity to save money and grow your real estate portfolio. Let’s have a conversation and determine whether you can benefit from a like-kind exchange.

Easements are property interests that grant to a party the right to use the real estate of another party, most commonly the right of way or the right to pass by foot or motor vehicle across the land owned by another. Another common easement is the utility services easement, which allows utility lines to cross one’s land to serve another parcel or that cross the land of another to serve your land. In Maine, with our breathtaking views of ocean, lakes, ponds and mountains, view easements have become a hot topic. View easements typically work by restricting the structures and vegetation that can be placed on portions of adjacent land, sometimes even allowing the holder of the easement to enter a neighbors land, usually with notice, to remove or trim trees that are obstructing the view or to remove structures that are blocking the view.

At Ballou Law, we have experience drafting and interpreting easements and can guide you in the process of granting or receiving an easement obligation.

Title problems can prevent businesses from selling or mortgaging their property. Occasionally, clients have commercial real estate title problems that require resolution.

We can help you determine the extent of your rights to your commercial property or help you defend any attack on your boundary rights and your title to your commercial property.

Ballou Law provides Seller Representation, which includes preparation of deed and associated forms. We can guide the Seller from the day they decide to sell until the conclusion of the transaction at closing. Common Seller forms that we prepare include Purchase and Sales Agreements, Limited Powers of Attorney, Agency Delegations to attend closing on a Seller’s behalf, and assist with the Maine Withholding Exemption Applications. Few out of state sellers realize that Maine requires 2.5% withholding until it is too late to get an exemption.

Hiring Ballou Law to assist you through the sale process will ensure that your closing goes smoothly.

The closing of a commercial transaction, whether it involves the transfer of business assets or commercial real estate, is not unlike the typical residential real estate closing, in the sense that buyer and seller and banker come together to sign documents and transfer money. We bring order to this important, and at times, chaotic process by creating an agenda or list of documents and tasks each party is responsible for.

As we approach the closing date, we monitor the list and check-off those tasks and documents that have been accomplished and this sets the foundation for a smoother, more efficient closing, so you can get back to business, doing what you do best.