Commercial Due Diligence Documents Delivery Deadline
The due diligence period is an essential period for any commercial real estate buyer. Commercial properties, unlike residential real estate need a thorough examination and judgment to ensure that the purchase is an acceptable cost. In the course of due diligence, buyers plan for structural, environmental mechanical, and building inspections. They also review the tax records of the property, verify the zoning restrictions, and search for any legacy debts left by previous owners.
The contract usually includes the timeline and deadline for the completion of due diligence. For instance, the due diligence documents deadline for delivery could be from seven to 14 days after the date of acceptance of the contract. The deadlines offer both the buyer as well as the seller the chance to settle any issues that might arise during the due diligence process.
Another important date is the association’s document expiration date – the date by which buyers can end the contract if they discover information in the HOA documents that renders the project financially unsuitable for them to pursue. This typically occurs between 10 and 14 days after the MEC. The contract also includes an objection resolution deadline – the time when the seller and buyer have to reach a resolution to any issues that the seller hasn’t effectively resolved. If there is no solution by the deadline, the contract will self-terminate. Buyers should always seek a “Notice to Terminate” and an agreement to release earnest money from their broker when they believe that the information unearthed during due diligence is so damaging that there is no possible resolution with the seller.