What is Commercial Property Law?

Commercial property law is the collective name for a broad body of law that governs the use, sale, and lease of buildings and land that are used for business purposes. Examples of commercial property include grocery stores, office buildings, and shopping malls. The primary goal of commercial property laws is to protect those who use and own commercial property. In practice, it is very much a blending of many aspects of law, from real estate and landlord/tenant law to contracts and insurance law. The specifics of what any set of commercial property laws requires vary tremendously by jurisdiction.

First and foremost, commercial property law is a branch of real property law. Real property laws set out ownership rights and liabilities that attach to land and buildings. Commercial real property laws are particularly important because they often involve major business transactions, important lease agreements, and community welfare and activities.

In the United States, each state, and within each state, most cities, have their own statutes and regulations that together form the governing commercial property law. The same is true in most other countries, as well. Commercial property is generally deemed a body of law that is best dealt with on a local level, with the rules set by the people who stand to be most affected.

Zoning is one of the primary ways in which local ordinances and municipal rules influence commercial property law. In most metropolitan and suburban areas, the local government decides which areas are appropriate for residences, and which are appropriate for businesses. Most of the time, the two do not mix: a store cannot be opened in a residential zone, for instance, and a person cannot rent a building in a commercial zone with the intent of living there. Commercial property law can be used to enforce zoning restrictions in commercial areas.

Commercial property law is also the primary body of law responsible for outlining owner liabilities and responsibilities with respect to property upkeep and maintenance. The standards to which a building must be built, as well as how well it must be maintained, are important parts of commercial property law. Part of this stems from cities’ desire to discourage run-down buildings, but a lot if it is also motivated by safety. Requiring property owners to keep their premises in top working order prevents injury both to employees and visitors, who more often than not are city residents. Many laws mandate that business owners carry a certain amount of insurance in case an accident occurs.

When buildings are leased or sold, commercial property law again plays a role. Ensuring that lease terms are equitable, setting requirements for rent and fair dealing, and overseeing commercial mortgage structures can all be aspects of the governing law. The specifics of what commercial property law requires depends entirely on the location and local rules, but the breadth of the law and the extent to which it touches most every aspect of commercial real estate remains consistent across borders.


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