In this article, we set out some tips to allow yourself an opportunity to work out if a commercial property is right for you before you are locked into a purchase.
We recommend that the sale and purchase agreement includes a robust due diligence clause if you want an opportunity to fully investigate every aspect of the property before you commit yourself to the purchase. Ultimately you want to reserve an option to renegotiate or even cancel the agreement if your due diligence investigations uncover an insurmountable problem.
If Cavell Leitch is given an opportunity to review a purchase agreement before you sign it, we will be able to tailor a due diligence clause that suits your circumstances. It is important that the clause is broad enough to allow you to satisfy yourself as to any aspect of the potential purchase that you consider relevant.
The due diligence clause should give you enough time and scope to investigate any aspect of your property which you feel is relevant. You should be allowed access to the property, or to anyone who holds information about the property, to complete your investigations. Finally, the due diligence clause should require the vendor to supply you with any information you request within a reasonable timeframe.
Cavell Leitch has an in-depth knowledge of how the market operates. We can use that experience and expertise to guide you as to the pertinent questions which you should be answering to maximise your opportunities and minimise your risk.
What areas your due diligence investigations should cover will differ on a case-by-case basis based on your circumstances and experience, and the type of property you are looking to purchase.
Typically, however, we would help you investigate the following:
Cavell Leitch will tailor our advice to suit you. We can prepare a full due diligence report which uses plain English to summarise each aspect of the property in as much detail as you require. Alternatively, if you are an experienced operator, you may prefer us to only highlight potential fishhooks and provide useful advice on their impact on you.
We are also able to provide expert advice on a number of areas. For example:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
If you are looking to purchase a commercial property it is important to surround yourself with the best advice. Please do not hesitate to contact one of Cavell Leitch’s commercial property specialists for assistance.