The due diligence period is a critical period for any commercial real estate buyer. Commercial properties in contrast to residential real estate require a thorough inspection and judgment to ensure that the purchase is at an acceptable cost. When conducting due diligence, buyers arrange for structural and environmental inspections, along with mechanical and building inspections. They also review property tax records, confirm zoning restrictions, and look for legacy liabilities left by dataroomspot.com previous owners.

The contract usually outlines the timeline and deadline for the completion of due diligence. Due diligence documents are usually delivered within seven to 14 business days from the contract’s acceptance date. The deadlines also provide the buyer and seller a chance to negotiate solutions for any issues that might arise during the due diligence process.

The association documents termination deadline is a different deadline. This is the time when a buyer can end the contract if they discover information in the HOA paperwork that makes the project financially unsustainable. This typically occurs 10-14 business days after the MEC. The contract also specifies an objection resolution date – the deadline by which the buyer must resolve any issues with the seller which haven’t been resolved satisfactorily. The contract will automatically terminate when no solution is discovered within the timeframe. If the information uncovered during due diligence is so damaging, the buyer should seek an “Notice to End” from their real estate agent and a release of earnest money.