LOS ANGELES-Commercial property buyers spend a lot of time carefully negotiating for seller representations and warranties that the seller is authorized to do the deal, no litigation affects the property, the property is in good condition, and the seller is not a registered terrorist.
Sellers counter by carefully negotiating time limits on survival and a cap on their liability for these representations and warranties, as well as a dollar threshold that claims must exceed before the seller can be sued.
Buyers frequently miss, however, one structural issue that may make all that careful negotiation rather pointless.
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