Real estate often appears to be a settled discipline—you sign a contract, conduct due diligence, close at a title company and magically the property becomes yours. While that may be an oversimplification, the past few years have brought an unprecedented wave of new laws affecting the commercial real estate industry. These developments demand a level of legal sophistication far beyond filling in blanks on a form lease or asking AI to generate a contract, and failing to account for them can lead to costly and unexpected consequences.
Marcia Owens, partner, chair of the retail group, at Honigman LLP.
I have highlighted several of these recent developments below, but it is certainly not an exhaustive list and does not include any of the tax law changes which could be an entirely separate article. Many of these changes may also cause us to do things a little differently, but designing a team that will stay abreast of new developments is key.
1. Mailbox Rule
The United States Postal Service (“USPS”) has updated its Postmarks and Postal Possession Rule.[1] A letter is now considered “postmarked” on the date it undergoes its first automated processing operation at a USPS facility—not when it is dropped off at a mailbox or post office. For contracts in which notice is effective upon “mailing,” a traditional postmark may no longer provide reliable evidence of the mailing date. A hand‑stamped postmark is still possible, but it requires physically visiting a USPS office before closing time to get the stamp. You can no longer rely on your mail carrier or a last‑minute mailbox drop to preserve your rights. You should consider changing your notice provisions to make sure they include a “reputable overnight courier, such as Fed Ex or UPS,” which is effective one business day after “deposit” of the notice and not upon arrival or acceptance, as these services often experience delays.
2. Know Your Buyer
More laws are being enacted to regulate who is buying property, which can be residential or commercial. Each law is a bit different in terms the parties requiring disclosure and the type of property, parcels located near military installations being of major concern.
— FinCen has issued a nationwide rule requiring certain real estate professionals involved in non‑financed transfers of residential real estate to report transaction details and beneficial ownership information.[2] The rule aims to increase transparency and combat money laundering in the residential real estate sector.
— A growing number of states have enacted laws limiting land purchases by individuals or entities from certain foreign countries, often designated as “countries of concern.” These restrictions frequently apply to agricultural land, property near military installations, or land tied to critical infrastructure. Requirements vary by state, making multistate transactions more complex and adding another item to your checklist.
3. Who Can Purchase Your Property
Several jurisdictions have adopted laws granting certain groups a right of first refusal to purchase property. These are enacted to prevent the displacement of residents. These laws are often not written with the precision that you would expect in a contractual right of first refusal provision and may include ambiguous timelines and uncertainty as to when a right has been waived.
— Illinois now grants mobile home park residents a statutory right of first refusal to purchase a park when the park owner sells the community.[3]
— Chicago’s Tenant Opportunity to Purchase – Northwest Side Housing Preservation Ordinance gives tenants in parts of the northwest side of Chicago a right of first refusal when a residential property is offered for sale.[4] The ordinance applies to properties within the 606 Predominance of the Block District, including Avondale, Hermosa, Humboldt Park, Logan Square, and West Town.
4. Changing Energy Requirements
Clean energy ordinances are springing up as municipalities promulgate laws restricting, for example, natural gas, setting minimum energy efficiency targets, requiring electric vehicle charging stations and requiring buildings to be solar ready.
— Illinois’ Electric Vehicle Charging Act imposes new requirements on newly constructed and renovated multifamily residential buildings to ensure EV‑charging readiness and tenant access.[5] These statutes generally include “right to charge” provisions, minimum EV‑ready infrastructure standards, and limits on association rules that restrict installations. Property owners must now consider new capital expenditures, potential retrofits and increased power needs.
— The Village of Oak Park has adopted an Electrification Ordinance prohibiting natural gas hookups in all newly constructed residential and commercial buildings.[6] This shift toward all‑electric systems affects construction costs, design decisions and long‑term operating expenses. It also raises questions about grid capacity and whether utilities can support widespread electrification at the pace local governments expect, especially when you also consider the power needs for the wave of industrial and data centers being developed.
5. Development and Use Restrictions
New laws can limit what you can do with a property, even if the use may otherwise meet the underlying zoning classification for the property.
— Aurora has enacted a temporary moratorium on new warehouse and data center developments while it reassesses the long‑term impacts of rapid industrial growth.[7] The pause allows the city to evaluate concerns related to traffic, air quality, land‑use compatibility, and infrastructure strain. Although existing approved projects may proceed, the moratorium signals a shift toward more deliberate planning.
— Chicago adopted an ordinance restricting new “small box retailers,” primarily dollar stores, from locating within one mile of an existing small box retailer owned or managed by the same controlling person.[8] The ordinance aims to prevent over‑concentration, improve access to full‑service groceries, and address the secondary impacts associated with clusters of low‑cost retailers. It also imposes enhanced maintenance, signage, and code‑compliance obligations.
6. Litigation
It is important not to forget that case law also plays a factor in the ever changing body of real estate law, adding yet another layer of uncertainty. As one example, there is a growing body of case law examining who is responsible for accidents and other incidents at a property. Did you know that it is reported that drivers crash their cars into buildings about 100 times per day?[9] This is much higher than previously thought and, while it may seem unrealistic to think that these accidents are the fault of the building or the owner, owners may have liability for failing to proactively install bollards or other protective barriers in front of commercial spaces vulnerable to vehicle‑into‑building crashes. Courts are increasingly evaluating foreseeability and whether property owners have a duty to mitigate such risks, essentially determining how to reduce the possible effects of human error. These cases have implications for insurance coverage, site design and broader risk‑management practices, even for the most careful owner.
This list is intended only to illustrate the volume and velocity of legal changes in an area of law once considered relatively stable, some of which can dramatically affect how you use your property. As AI and other advancements speed up our ability to enter into and close transactions, it is important to keep in mind that each piece of real estate is unique and consider each new legal development—from postmark rules to electrification mandates. Even what may be permitted in one municipality may not be in another. Failure to plan and to stay abreast of legal changes can easily derail a transaction, adding both cost and time. Therefore, it is important to invest in a strong team, think critically about every deal and do your homework—even when a transaction looks just like the last one.
Marcia Owens is a Partner and Chair of the Retail Group at Honigman LLP. Her practice focuses on representing retailers, developers, lenders and investors and spans all aspects of commercial real estate, from acquisitions and dispositions, to commercial leasing, finance, workouts and restructuring. Marcia has been recognized for her work by Crain’s, Law Bulletin Publishing Company, Leading Lawyer, SuperLawyers and Best Lawyers.
[1] 39 CFR Part 111, Section 608.11.
[2] 31 C.F.R. Part 1031.
[3] 765 ILCS 745/6.25.
[4] Chicago Municipal Code, Title 5, Chapter 14‑050.
[5] 765 ILCS 1085/1 et seq.
[6] Village of Oak Park, Ordinance No. 23‑47-23-48.
[7] City of Aurora, Ordinance No. O25-064.
[8] Chicago Municipal Code § 17-9-0133.
[9] Storefront Safety Council, Storefront Crash Statistics.
