Completing Your Due Diligence on a Commercial Real Estate Transaction
When you intend to move forward with a commercial real estate purchase, there are many steps you need to complete before you own the property. While many steps are legally necessary, others are simply smart business practices. Performing your due diligence is the best way to ensure you buy a property you truly want and that it will serve your business purposes. Without due diligence, you could miss something important like a defect in the property or a regulatory obligation that causes you to lose money in this transaction or make the property unsuitable for your needs.
Complete Due Diligence Based On Your Needs
What you need to check and uncover during your due diligence strongly depends on your goals, including whether you will be the end user of the property, an investor, or a developer. As an end user, you need to be confident that the property will fit your needs or if you will need to make repairs or add structures to use it. As an investor, you should focus on the financial history of the property and its projected performance. You will want to know about existing liabilities you will become responsible for and it’s average cash flow. Finally, if you are a developer, you need to thoroughly understand any zoning or regulatory restrictions on the property.
Whatever your interest in a commercial real estate transaction, you should work with West Palm Beach commercial real estate attorney Larry E. Bray. With decades of experience under his belt, Mr. Bray understands the questions that need to be asked and the documents that must be reviewed to ensure a solid and successful sale.
Basic Due Diligence
With your attorney, you should review:
- The purchase agreement and ancillary documents;
- The title policy;
- Surveys to the property;
- The physical condition of the property, including all structures on the property;
- An environmental suitability inspection;
- Whether the property is subject to any regulatory actions;
- Whether the property has any easements or other restrictions;
- Whether there are any liens against the property;
- Any legal actions threatened or filed against the property;
- The building’s financial statements, including utility and maintenance bills;
- The current leases;
- The current tenant’s payment history;
- The transfer of the tenant’s deposits;
- The property’s current insurance policies; and
- Your insurance coverage possibilities.
These are just a few of the basic steps you and your attorney must complete before a commercial real estate purchase. By working with Larry E. Bray, you can go over a more thorough list of due diligence necessary for the property and your intended purposes.
Contact a West Palm Beach Commercial Real Estate Lawyer
Whether this is your first commercial real estate transaction or your fiftieth, you need the help and skills of an experienced attorney to properly complete the purchase. Larry E. Bray has more than three decades of experience as a business transactions and real estate lawyer. He has helped countless clients become successful property owners. For assistance in your transaction, contact the Law Offices of Larry E. Bray, P.A. at 561-571-8970.