Due diligence is a crucial element of any commercial real estate transaction. It allows buyers to investigate the property with their own professional advisors to determine whether the property is a good fit the buyer.
In a lot of cases the contract will state that the seller provides all the information and documents required by the buyer to perform their due diligence. These include surveys and titles and improvement location certificates (ILCs), as well as zoning concerns and any prior approvals to zoning that may affect the property. Due diligence timeframes are usually 30-60 days, depending on the needs of both parties.
Once a buyer has completed their due diligence, they will schedule mechanical, structural engineering, and building inspections. The contract will usually contain a box that indicates the due diligence date and an optional date for the survey. The buyer will receive an written report of the results of their inspections. They will then have the option of deciding whether to continue the purchase or to cancel the contract.
The Association Documents Objection Deadline is another thing that is frequently agreed upon. It allows buyers a certain amount time to go through HOA documentation, including architectural control, pet, and covenants and parking regulations. This is typically set for 10-14 business days from the MEC.
In addition a new ILC or survey could be required if the previous one is not up-to-date or if there are any issues regarding the property Read Full Report lines and boundaries. The New ILC/Survey deadline is a date that specifies the time when the buyer must be given this document. Any objections or withdrawals must be submitted prior to this date.