Due diligence is a crucial part of any commercial real property transaction. Due diligence allows the buyer to examine the property with their professional advisors, and determine whether the property is suitable for them.
Typically the contract will oblige the seller to provide all the necessary documents and information needed by the purchaser to perform their due diligence. These include survey and title policies, along with improvement location certificates (ILCs), as well as zoning concerns and any prior zoning approvals which may impact the property. Due diligence is typically set at 30-60 days, depending on the specific requirements of the parties.
After a buyer has completed their due diligence, they will usually schedule structural, engineering, building and mechanical inspections. The contract will typically include a box which indicates the due diligence date and an optional date for the survey. The buyer will be provided with an written report of the results of their inspections. They will then have the option of deciding whether to keep the purchase or cancel the contract.
Another common item to negotiate is m&a online repository the Association Documents Objection Deadline which provides the buyer with a specific period of time to review HOA documents, including pet, architectural control, covenants and parking regulations, among others. This is usually set at 10-14 business days from the MEC.
A new ILC or survey is required if a previous one was not up-to-date or if there were any issues with the boundaries of the property and lines. The New ILC/Survey deadline is a date that specifies the date by which the buyer has to be given this document. Any objections or withdrawals must be filed before the deadline.