Commercial Real Estate Due Diligence Documents

The due diligence process is an essential part of a commercial estate transaction. Due diligence allows the buyer to examine the property with their professional advisors and determine if the purchase is right for them.

Often, the contract will stipulate that the seller must provide all necessary documents and details for the purchaser to perform their due diligence. These include surveys, title policies, and improvement location certificates (ILC’s), along with Zoning matters and any prior zoning approvals that may impact the property. Due diligence is typically agreed to be between 30 and 60 days, depending on the specific requirements of the parties.

After a buyer has completed their due diligence, they usually schedule structural, engineering, building and mechanical inspections. A box is included in the contract that identifies the date of due diligence and optional survey. At the time of these dates, the buyer will receive a report on the results of their inspections. They can decide to continue with the purchase or to end the contract.

Another item that is frequently negotiated is the Association Documents Objection Deadline which provides the buyer with a specified period of time to read HOA documents, such as architectural control, pet, parking regulations and covenants, among other things. The typical timeframe is 10-14 business days from the MEC.

A new ILC or survey is required when a previous one was not current or if there were any issues with the property boundaries and lines. The New ILC/Survey Deadline is a date that outlines when the buyer has to be provided with these documents, and any objections should be resolved or withdrawn before this date.

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