The due diligence process is a crucial part of a commercial real estate transaction. It allows the buyer to review the property with their personal advisors, and to determine whether the property look at this now is the right one for the buyer.
Often, the contract will stipulate that the seller must provide all necessary documents and information to allow the purchaser to do their due diligence. These include surveys and titles, along with improvement location certificates (ILCs), and zoning issues and any prior zoning approvals which may impact the property. A due diligence period is typically negotiated to be between 30 and 60 days depending on the particular requirements of the parties.
Once a buyer has completed their due diligence they will arrange mechanical, structural engineering, and building inspections. The contract typically has an item that identifies the due diligence date as well as an optional survey date. After these dates, the purchaser will be provided with a report of the results of their inspections. They can decide to continue with the purchase, or even to terminate the contract.
The Association Documents Objection Deadline is another thing that is frequently agreed upon. It allows buyers a certain amount of time to review HOA documents, including architectural control, pet and covenants, as well as parking regulations. The deadline is usually set for 10-14 business days from the MEC.
Additionally the new ILC or survey could be required if the previous one is not current or if there are any issues about property lines or boundaries. 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 made before this date.
