Commercial Real Estate Due Diligence Documents

Due diligence is a crucial part of any commercial real property transaction. Due diligence allows buyers to review the property with their professional advisors and determine whether the purchase is suitable for them.

Often, the contract will require the seller to supply all of the necessary documents and information for the purchaser to complete their due diligence. These include survey policies, title policies, and improvement location certificates (ILC’s) along with Zoning matters and any prior zoning permits that could impact the property. Due diligence timeframes are typically negotiated to be between 30 and 60 days, based on the particular needs of both parties.

After a buyer has completed their due diligence they will plan structural, mechanical engineering and building inspections. The contract typically has an indication of the due diligence date and an optional date for the survey. The purchaser will receive an written report of the results of their inspections. They will then be able to decide whether to keep the purchase or to cancel the contract.

The Association Documents Objection Deadline is another item that is commonly negotiated. It gives buyers a certain amount of time to go through HOA documentation, including architectural control, pet and covenants and parking rules. This is typically set at 10-14 days following the MEC.

In addition it is possible that a new ILC or survey might be required if the prior one is not up-to-date or if there’s a problem with regard to property lines and boundaries. The New ILC/Survey Deadline is a date which specifies when the buyer has to receive these documents and any objections need to be addressed or withdrawn by this date.

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