A List of Due Diligence Steps for a Commercial Real Estate Purchase
As you prepare for your next commercial real estate deal in South Florida, it’s a good idea to prepare a list of important due diligence steps.
These steps are complex and will vary from one deal to another, so you’ll want the advice of a Fort Lauderdale commercial real estate attorney to help you determine them.
Below are some of the more common diligence steps for commercial real estate transactions. Bear in mind that this is far from an exhaustive list, and that you should meet with an attorney for specific advice:
- Profit and Loss Statements – you’ll want to obtain profit and loss statements for the past 3 years at minimum and preferably 5 years.
- Utility Bills – get a copy of current bills showing gas, electric, water and sewer charges for the past 2 to 3 months at minimum.
- Rent Roll – get copies of the current rent roll including payment histories, current rent, delinquencies, security deposits, and years of occupancy.
- Leases – obtain a written copy of each lease along with a guarantee that there are no verbal leases.
- Tax Bills – get a copy of tax bills for the past 3 years including any incentives and special assessments.
- Service Contracts – obtain copies of all contracts related to the maintenance and servicing of the property.
- Insurance – copies of all insurance policies related to the property including risk assessments and riders.
- Loan Documents – obtain all existing loan documents including deeds of trust, mortgages and notes.
- Title Documents – get copies of every title policy related to the property and all other documents related to the acquisition of the property.
- Environmental Inspection – hire a professional to inspect the property for issues such as lead paint, asbestos or wetlands.
- Title Search – this can typically be performed by your Fort Lauderdale commercial real estate attorney and should uncover any title defects or issues.
- Any additional steps as deemed necessary
Call Schecter Law today for due diligence advice
There are several additional preliminary and pre-closing due diligence steps that you may need to perform in order to guarantee a satisfactory commercial real estate deal.
You will want to take your time with each of due diligence steps mentioned above and carefully review every document and record related to your transaction, usually with the assistance of your attorney.
Mark Schecter at Schecter Law is a highly experienced commercial real estate lawyer in Fort Lauderdale who can assist with your due diligence and many other legal aspects of your transaction. Contact Schecter Law today at (954) 779-7009 for a consultation.