The due diligence period is a critical time for any commercial real estate purchaser. Commercial properties are, unlike residential real estate, require a thorough examination and judgment https://dataroomspot.com/due-diligence-materials-online-storage-options in order to ensure that the purchase is at an acceptable cost. When conducting due diligence, buyers arrange for environmental, structural mechanical, and building inspections. They also review the tax records of the property, confirm the zoning restrictions, and search for legacy liabilities left by previous owners.
The contract typically lays out an estimated time frame and a date for the completion of due diligence. Due diligence documents could be delivered within seven to 14 business days of the contract acceptance date. The deadlines allow both the buyer and the seller the opportunity to negotiate any issues that might come up during the due diligence process.
Another important deadline is the association’s document end date – the date when the buyer is able to terminate the contract if they discover information in the HOA documents that makes the project financially unsuitable for them to pursue. This typically occurs 10-14 business days after the MEC. The contract also specifies an objection resolution deadline – the time by which the seller and buyer must find a solution to any issues that the seller has not satisfactorily addressed. The contract automatically ends when no solution is discovered within the timeframe. If the information discovered during due diligence is so damaging the buyer must be able to request a “Notice to Terminate” from their real estate agent and an agreement to release the earnest money.
