Acquiring commercial real estate can be essential to operating a Florida small business. Before your transaction is complete, you will be provided with a set time period to complete due diligence. The due diligence period is one of the most important steps of a real estate transaction, and it’s essential that a buyer know what to do during this timeframe. Here is more on exercising due diligence during your Florida real estate contract.
What is the Due Diligence Period?
The due diligence period is the specific length of time a buyer has to investigate a property before completing a real estate transaction. During due diligence, a buyer can examine the physical premises and learn more about the property’s title history. Due diligence can last approximately 30 to 60 days. This timeframe is for the buyer to learn more about the property and determine whether they want to go forward with the sale.
What are the Seller’s Responsibilities During Due Diligence?
When a property is sold, the seller must disclose any known defects. During the process, the seller is responsible for completing an assessment of the property to identify any issues.
What Should the Buyer do to Exercise Due Diligence?
Depending on the circumstances, you may need to return to the property to conduct physical inspections multiple times. You will also need to investigate details that are not visible and concern the property’s history, use, and requirements.
These areas include but are not limited to:
Conducting a Title Search—this step refers to researching a property’s ownership history or chain of title. It’s possible that a property is subject to liens or other encumbrances. By conducting a search, a buyer can find out if the property has clear title before completing the transaction.
Zoning and Other Regulations—Another important part of conducting due diligence involves researching zoning rules and other regulations that may apply to the property. As a buyer, you will want to be certain that it is permissible for the property to be used for your intended purpose.
Environmental Hazards—Buyers should also be aware that commercial real estate can contain or be situated on and around the land that may have environmental contaminants. You will want to ensure that you complete a comprehensive environmental evaluation before the acquisition. During the process, you may learn that a property has issues. For example, there may be toxic mold or a parcel that is situated on former golf course land that is contaminated with arsenic. In this situation, you may need to negotiate with the seller to reduce the price to reduce the cost of remediation.
By conducting your due diligence, you can get the information you need to determine if you want to proceed with a real estate transaction. It may be that the risks are minimal. However, after a complete investigation, you may also learn that there are issues that warrant negotiating a lower sales price or for the seller to pay the repair costs.
At the Florida Small Business Center, we help clients understand their responsibilities during the due diligence process and know what steps to take to help you protect your interests. Contact us today to talk with a small business attorney who can help you with your commercial real estate transaction.
Contact an Experienced Florida Business Lawyer
Attorney Richard Sierra at the Florida Small Business Legal Center assists clients like you with commercial leasing, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.