Commercial real estate transactions tend to be risky and often involve large amounts of money. But by conducting due diligence, buyers might be able to manage the risks better and make educated decisions regarding the transaction. One of the ways for buyers to conduct due diligence successfully and efficiently is by working with commercial real estate attorneys.
What is due diligence?
Due diligence usually occurs after an offer and before closing a deal. During this period, the buyer typically investigates various facts about the property, such as its history, physical condition and market potential. Sometimes, it is an explicit requirement before a party can buy a property. Due diligence is crucial because it ensures the buyer gets what they are paying for.
How can a lawyer help with due diligence?
The focus of due diligence often varies depending on the buyer’s needs. For instance, a developer likely needs different information from a buyer looking to rent out the property. Regardless of the goal, a commercial real estate attorney generally helps with due diligence in the following ways:
- Preventing confusion – Due diligence is a complex process typically involving multiple steps and procedures concerning the buyer, firms and various third parties. Commercial real estate attorneys understand the process and often have a lot of experience in it, so they can help organize these steps and track completed tasks.
- Contacting third parties – Buyers often need to consult with third parties who can help inspect and investigate specific issues related to a property and its surrounding area. For instance, they might call on someone to look into possible problems with natural disasters. A lawyer can contact these parties while the buyer focuses on other tasks, helping prevent costly delays.
- Assisting with requirements – Due diligence often has to follow specific regulations and guidelines. An attorney can communicate the requirements to the buyer and ensure everything is completed on time.
Due diligence is a complicated but necessary process. With industry experience and a deep understanding of the law, commercial real estate attorneys help keep the due diligence process efficient, comprehensive and helpful to buyers.
