Questions about Commercial Property Laws

Commercial property is property in the form of buildings or land that is used to generate a profit, either from rental income or capital gains. This would include everything from industrial property, office buildings, medical centers, malls and hotels to farm land, multifamily housing buildings, garages, and warehouses. In several states, residential property can also be classified as commercial property for borrowing and tax purposes based on the number of units it has.

Listed below are a few questions answered by lawyers on commercial property related issues.

Three potential renters have contacted me to open different medical marijuana businesses in my commercial property in Oregon. One wants to open a clinic, another wants to grow the plants indoors as he is a legal supplier, and the third wants to rent the property as a meeting place. Is this considered a legal use of the property?

Medical marijuana is tricky. Technically, it is allowed under Oregon law, so running those businesses would be alright according to the state of Oregon, as long as the business owners comply with state and local regulations. However, federal drug laws supersede state laws under the Supremacy Clause of the Constitution. Therefore, using the property to grow, sell, or distribute the drug would be considered a violation of the Federal Controlled Substances Act, and hence would be illegal.

Can the bank put up my commercial property on auction without letting me know?

In most cases, if the bank decides to auction a commercial property after foreclosure, it would need to issue notice to the public as well as to the owner of the property so that he/she would have the opportunity to reclaim it.

Since we are unable to make payments on a commercial property that is in our name, we are going to lose it to the bank. What other assets can the bank attack in this regard?

If you are financing the commercial property, the bank can hold you responsible for any deficiency they incur between what you owe them and what the property finally sells for at the foreclosure auction. They would need to sue you and get a court judgment, but then they could seize your bank accounts, lien any real estate owned by you, and garnish any non-exempt wages up to 25%. They could also lien vehicles, although that is not considered normal procedure unless the vehicles are paid for.

I have a commercial property in Missouri that will be auctioned off at noon today. How can I stop foreclosure proceedings?

You may be able to stop the proceedings by filing a Chapter 11 bankruptcy. In most cases, this should immediately stop the foreclosure action and allow you to set up a plan to reinstate your mortgage arrearages. However, it is best that you hire an attorney for this. In the event you choose not to do use an attorney, you would need to download the forms online and file them on your own prior to the sale. Once you have filed this petition, you would need to notify the plaintiff.

Commercial property laws differ from state to state. However, as an owner of a commercial property you need to be aware of all the statutes and regulations that apply to commercial property.