Commercial Due Diligence Documents Delivery Deadline

The due diligence period is a critical time for any commercial real estate purchaser. In contrast to residential real estate, where there are a myriad of consumer protection laws commercial properties require thorough examination and a careful judgment to ensure the purchase is a good investment at a reasonable cost. In the course of due diligence, buyers plan for environmental, structural, building and mechanical inspections. They also look over the tax records for their property, confirm zoning restrictions, and look for any legacy debts left by previous owners.

The contract typically lays out the timeline and deadline for the completion of due diligence. For instance the due diligence documents delivery deadline could be anywhere from seven to 14 days after the date of contract acceptance. The deadlines allow both the buyer as well as the seller the chance to discuss any issues that may arise during the due diligence process.

Another important date is the association’s documents expiration date – the date on which the buyer can terminate the contract if they find information in the HOA documentation that would make the project unfinancially viable for them to pursue. This usually occurs 10-14 business days following the MEC. The contract also outlines an objection resolution date – the date that the buyer has to resolve any problems with the seller that have not been resolved satisfactorily. The contract will automatically expire if there is no solution by the deadline. If the information uncovered during due diligence is so damaging the buyer must seek a “Notice to end the contract” from their real estate agent as well as an agreement to release the earnest money.

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