Technically, New York law does not require a buyer to hire a real estate attorney for every transaction. In practice, however, nearly every residential and commercial real estate transaction in New York involves attorneys representing both the buyer and seller. Unlike many other states where title companies handle much of the closing process, New York attorneys play a central role in negotiating contracts, conducting due diligence, addressing title issues, and coordinating the closing.

A real estate attorney does far more than review paperwork. Before you become legally bound, your attorney can negotiate contract terms, review title reports, identify easements or restrictive covenants, evaluate zoning issues, coordinate with lenders, and help resolve legal issues that could affect the property's value or your intended use. For commercial transactions, that due diligence often extends to reviewing existing leases, service contracts, environmental concerns, certificates of occupancy, and pending litigation involving the property.

Our view is that hiring a real estate attorney is one of the most important investments you can make during a New York real estate transaction. The legal fees are typically insignificant compared to the value of the property, and identifying a problem before closing is almost always less expensive than litigating over it afterward.

Commercial real estate due diligence goes far beyond confirming that the seller owns the property. Buyers should review title reports, surveys, zoning regulations, certificates of occupancy, existing leases, service contracts, tax obligations, environmental issues, pending litigation, and financing documents. In New York City, buyers should also investigate Department of Buildings (DOB) records, open violations, permits, ECB/OATH violations, and whether the property's current use complies with applicable zoning regulations.

One of the biggest mistakes commercial buyers make is assuming that because a building has been used for a particular purpose, that use is legally permitted. It may not be. We regularly encourage clients to verify that the property's certificate of occupancy, zoning designation, and regulatory history support their intended business operations. If you plan to renovate, expand, or change the use of the property, those issues should be investigated before closing.

Our advice is to approach due diligence as an opportunity to uncover problems, not simply confirm the deal is moving forward. Discovering title defects, zoning restrictions, unresolved violations, or environmental concerns before closing gives buyers leverage to renegotiate the purchase price, require the seller to correct the issue, or walk away from a transaction that no longer makes business sense.

Many buyers are surprised to learn that an accepted offer is not the same as a binding contract in New York. Unlike some states, an accepted offer generally serves as the beginning of negotiations rather than the end of them. Until both parties sign a written contract of sale and it is fully executed, either side may still walk away or continue negotiating the terms of the transaction.

Once an offer is accepted, the attorneys typically begin negotiating the contract of sale while the buyer conducts preliminary due diligence and works with a lender, if financing is involved. The contract may address financing contingencies, inspection rights, closing dates, representations and warranties, title issues, and other provisions that can significantly affect the transaction. After the contract is signed, the buyer generally pays a contract deposit, and the parties continue with the remaining due diligence, financing, and closing process.

One of the biggest misconceptions we see is buyers believing they "have the deal" simply because the seller accepted their offer. In New York, nothing should be taken for granted until the contract has been fully negotiated and signed. That period between an accepted offer and a signed contract is often where experienced counsel adds the most value by identifying issues, negotiating favorable terms, and protecting the client's interests before they become legally obligated to close.

Buying property with a business partner or investor involves much more than deciding how to split the purchase price. Before closing, the parties should agree on ownership percentages, management responsibilities, capital contribution requirements, decision-making authority, profit distributions, refinancing, future capital calls, and what happens if one owner wants to sell their interest or can no longer contribute financially.

Many partnership disputes arise because everyone assumes they share the same expectations until something goes wrong. What happens if one owner wants to renovate the property and another does not? Who decides when to sell? What if additional money is needed for repairs? These questions should be answered in a written operating agreement, partnership agreement, or other governing document before the property is acquired. In New York, many investment properties are purchased through limited liability companies, making a carefully drafted operating agreement particularly important.

Spend the time negotiating with your business partner before you become co-owners. It is much easier to have difficult conversations while everyone is aligned than after the property has appreciated, unexpected expenses arise, or the relationship begins to deteriorate. A well-structured ownership agreement can prevent disputes that might otherwise end in expensive litigation.