The best time to consult an attorney when you are considering a commercial deal is before you sign a contract or purchase offer. It is important to understand that brokers make a commission on the transaction and generally only get paid if it closes. There is an inherent conflict created by this situation, as their desire to close (and get paid) may impair their desire to get the best deal possible – something that can take time to negotiate.

It is also important to understand that commercial real estate or business sale transactions raise complex issues. These transactions require consulting with a variety of professionals to get all of the information you will need to receive the best deal for your situation. A broker’s role in the process is to bring the parties together – to be a matchmaker. Your financial advisors will advise on tax and accounting issues. Your accountant should be consulted to review the financial records and give an opinion on the allocation of the sales price (how much of the total price is allocated to things such as equipment, inventory, good will, or a consulting contract).

The role of the attorney is to advise on the legal issues. Among other things, your attorney can identify necessary preconditions, pitfalls, potential liabilities, ways to mitigate your risks, appropriate contingencies to address important issues (e.g. liquor license approval) and the appropriate due diligence that should be done before you proceed. The attorney will identify liens, taxes and other title defects and provide appropriate remedies to satisfy all parties’ needs. Your attorney can assist with necessary permits, inspections and licenses that may be required by government agencies (for example, building code, health department, business permits, liquor licenses, etc.). Your attorney can help you decide on the best structure and form an entity such as a partnership, LLC or corporation for your transaction. The earlier you bring the issues to the attorney, the more opportunity for timely advice on important issues.

Each of these professionals fills a role necessary in ensuring the transaction meets both parties’ needs. In order for them to do their job well, they should be provided information early in the process. It can be difficult and costly to change a provision once a contract is signed. It is best to get advice before the documents are executed and become binding. Your negotiation position is greatest before the documents are signed and may be greatly reduced after you are legally bound to certain terms of the deal.