The due diligence period is a crucial period for any commercial real estate buyer. Commercial properties like residential real estate need a thorough examination and judgment in order to ensure that the purchase is at an acceptable price. During due diligence, purchasers arrange for structural, environmental mechanical, and building inspections. They also obtain property tax records, verify zoning restrictions and check for legacy liabilities from past owners.

The contract will typically include a timeline for completion of due diligence. For example the due diligence documents delivery deadline could be anywhere from seven to 14 days after the date of contract acceptance. The deadlines also provide buyers and sellers the chance to discuss solutions to any issues that may arise during the due diligence process.

Another important deadline is the association’s document termination date – the date when the buyer is able to terminate the contract if they discover information in the HOA documents that renders the project unfinancially viable for them to pursue. This usually occurs 10-14 business days after the MEC. The contract also includes an objection resolution deadline – the date when both parties must come to a solution to any issues that the seller has not successfully resolved. If no solution is reached within the timeframe, the contract will automatically terminate. Buyers should always request an “Notice to End” and an earnest money release from their real estate broker should they feel that the information unearthed during due diligence is so inconvenient that there is no way to reach a resolution with the seller.