Why Due Diligence Is Required When Selling Commercial Properties

Are you looking at selling a commercial property? In which case, you need to read this blog post. In this blog we look at why due diligence is required when selling commercial properties. We also look at how the commercial property solicitor of the buying party will do their due diligence for the buying party.

The due diligence by a commercial property solicitor on behalf of the buyer is a critical step that you need to be prepared for. It allows the buyer to thoroughly investigate the commercial property. They will also need to review the legal title of the property. This will help ensure the buyer that they are making a fully informed and safe investment.

There are a number of aspects of due diligence required when selling a commercial property. We have listed some of these below for you. However, when you work with our commercial property lawyers in Peterborough, we will manage this with you and for you.

• Inspections

The buyer may choose to visit and inspect the property and its condition. This could include environmental assessments, plumbing and electrical checks, structural inspections and evaluations of the HVAC systems.

• Title Search

Your buyer will examine the title of the property. This will be done to ensure that title is clear of any liens, encumbrances or legal issues. This is because these things could affect the ownership of the property. A buyer may also review any existing easements or covenants that could affect the commercial property. This will include lease reviews of a leasehold commercial property, or consent from the Freeholder.

• Lease Agreements

If your property has tenants, the buyer will review all lease agreements. They will do this to understand rent terms and rent amounts. They will also review the lease expiration dates and any lease terms.

• Compliance

The buyer will confirm that the commercial property complies with all local building regulations and requirements. They may also check for any outstanding planning or building regulation violations. This is so they buyer knows the commercial property is legal and compliant.

• Boundary Verification

There are times when buyers will order a building survey of the commercial property. This is done to verify the boundaries of the property. It will also show the buyer the easements and general condition of the property and boundaries.

When selling commercial properties, you need to be prepared for this due diligence. It is vital that you provide accurate and complete information as this will facilitate the process. Commercial property buyers will use this stage to assess the property entirely. They can then make their decision around purchasing the property.