Due Diligence Period
| Understanding your Due Diligence Period When Purchasing Commercial Real Estate Hi all! My name is Jenny Bodine, I’m an attorney with the real estate department at Evans Fox. If you have purchased or sold a piece of commercial real estate, you have likely heard the term “due diligence period”. The due diligence period in commercial real estate refers to the time a buyer has to investigate the property while under contract and before closing on the purchase. Due diligence periods are often negotiable, lasting anywhere from 30-90 days depending on the contract. During the due diligence period, the buyer may be responsible for obtaining an inspection of the property, performing environmental studies (sometimes with limitations), reviewing zoning compliance, and potentially reviewing financial information for the seller as it relates to the property. The goal is to identify any risks or issues that could impact the value of the property or the buyer’s plans with the property. If concerns are identified during the due diligence period, the buyer can raise those issues with the seller and either work to remedy the issues, or terminate the contract and, oftentimes, receive the contract deposit back. Being aware of your due diligence period, the timeline for it, and the items to which you are entitled to inspect are a crucial step in ensuring a well-informed and secure investment. If you would like more information or need any help our team here at Evans Fox is here to assist you. |