Legal Steps After Closing a Commercial Property Sale

Closing the sale of a commercial property may seem like the final chapter in a complex transaction, but the legal responsibilities don’t end there. In fact, a number of important legal steps must be followed to ensure full compliance, avoid disputes, and protect both buyer and seller from future liabilities.

At The Real Estate Law Firm, we often guide clients through the often-overlooked but essential legal procedures that arise after the closing table. This article outlines the key post-closing legal steps commercial property buyers and sellers must take to wrap up the transaction thoroughly and protect their investment.

Ensure proper post-closing steps with our commercial real estate service.

1. Record the Deed with the County Recorder

Once the closing documents have been signed, the new ownership must be made official by recording the deed with the appropriate County Recorder or Recorder of Deeds. Failing to record the deed could leave the buyer vulnerable to claims from other parties.

The Real Estate Law Firm assists clients in ensuring timely and correct recording of property deeds.

2. Transfer of Utilities and Operational Licenses

After closing, the buyer needs to transfer or set up new utility accounts and obtain or update any necessary operational permits, including:

• Water and electricity

• Sewer and waste disposal

• Internet and telecoms

• Local business operation licenses

  
  

Missing this step can delay business operations or result in code violations.

3. Review of Final Title Policy

The title insurance policy received at closing should be carefully reviewed post-closing to confirm that:

• The correct legal entity is listed as the insured

• The policy covers the proper legal description

• There are no unanticipated exceptions

  
  

At The Real Estate Law Firm, we help our clients understand what their title insurance does—and does not—protect against.

4. Ensure Satisfaction and Recording of Prior Liens

If the property had existing liens (e.g., mortgages), it’s crucial to ensure that these were paid off and properly released and recorded. Otherwise, the buyer might inherit unexpected legal burdens.

Your attorney should:

• Confirm lien releases with previous lenders

• Follow up on recording confirmations

• Retain documentation for future reference

  
  

Protect your property—review lien releases with our team.

5. Post-Closing Lease and Tenant Management

If the property is leased or partially occupied, the buyer must:

• Notify tenants of new ownership

• Transfer security deposits properly

• Review lease agreements for compliance

  
  

The Real Estate Law Firm offers post-closing lease reviews to ensure all tenant obligations and rights are properly transferred.

6. Update Corporate and Tax Filings

Post-closing, both buyer and seller must update their corporate records, tax filings, and asset portfolios to reflect the change in property ownership.

This includes:

• IRS Form 8822-B (change of business address)

• Updating depreciation schedules

• Informing state business registration entities

  
  

7. Confirm and File Property Tax Updates

Property tax responsibilities may shift mid-cycle. Buyers should:

• Verify proration accuracy from the closing statement

• Contact the local tax assessor’s office

• Ensure tax billing information is updated

  
  

Some counties also require buyers to file a property transfer declaration after the sale.

8. File UCC-3 Terminations and Security Releases

In commercial deals, Uniform Commercial Code (UCC) filings are common, especially if there was any seller financing or equipment used as collateral.

The buyer (or seller’s lender) should file a UCC-3 Termination to release old financing statements, preventing future confusion or credit issues.

9. Update Insurance Policies

New owners must immediately bind insurance coverage on the property. This includes:

• General liability

• Property insurance

• Loss of rental income (if applicable)

• Builder’s risk or commercial package policies (for renovations)

  
  

Lenders will also require proof of updated insurance as a condition of the loan closing.

10. Retain Closing Documents for Legal Protection

All signed documents, agreements, and proof of funds transfer should be securely stored and backed up. These include:

• Purchase and Sale Agreement

• Closing Disclosure or Settlement Statement

• Title insurance policy

• Recorded deed and bill of sale

• Lease and tenant notices

  
  

The Real Estate Law Firm provides clients with organized post-closing binders or digital folders of essential documents for long-term security.

Why These Legal Steps Matter

Failing to complete these legal steps after a commercial real estate closing can result in:

• Tax penalties

• Utility disruptions

• Tenant lawsuits

• Ownership disputes

• Regulatory non-compliance

  
  

With legal guidance from The Real Estate Law Firm, buyers and sellers can prevent costly mistakes and enjoy true peace of mind.

Partner with The Real Estate Law Firm

Post-closing legal work may not be as exciting as signing the final papers, but it’s just as important. At The Real Estate Law Firm, we help clients navigate the fine print, file necessary documents, and tie up every loose end after the deal is done.

Whether you're a developer, investor, or business owner, let our experienced attorneys guide you beyond the closing table.

Have questions after closing? Contact our attorneys today.

FAQs: Legal Steps After Closing a Commercial Property Sale

1. What is the first legal step after closing a commercial property? 

Recording the deed with the County Recorder is the most important first step to legally establish property ownership.

2. Do I need to notify tenants after purchasing a commercial property? 

Yes, buyers must inform tenants of new ownership, update payment instructions, and handle security deposit transfers.

3. What if the seller’s mortgage or lien was not removed post-closing? 

You or your attorney should follow up with the seller's lender and ensure lien releases are recorded immediately.

4. Who handles the transfer of utilities and licenses after closing? 

Typically, the buyer or their legal team arranges utility account transfers and ensures that business licenses are valid and updated.

5. What are UCC-3 Terminations and why are they important? 

They remove prior financing statements on property or equipment, avoiding legal claims from previous creditors.

6. Should I get new insurance for the property after closing? 

Absolutely. All insurance policies must reflect the new ownership and coverage should start immediately upon closing.

7. How do I confirm the title policy covers my interests? 

Review your final title policy with a legal expert to ensure all terms are accurate and any exceptions are noted.

8. What happens if property taxes are unpaid at the time of transfer? 

Tax prorations at closing usually address this, but the new owner should verify tax records are updated and paid.

9. Do I need to keep all post-closing documents? 

Yes. Keeping detailed, well-organized records helps defend against future disputes and supports tax or insurance claims.

10. Can The Real Estate Law Firm handle these post-closing tasks for me? Yes. Our team specializes in managing post-closing procedures to protect your investment and legal standing.