Due Diligence Checklist

Acquisition Actions

• Signed Letter of Intent

• Investment committee presentation and approval

• Select legal counsel

• Review of the Purchase Contract

• Access agreement

• Client Authorization Letter

• Portfolio Manager Authorization Letter

Title/Survey/Zoning Matters

• Choose a title Company and review all underlying documents

• Order current title

• UCC and judgment lien searches

• Order new ALTA survey

• Parcel maps

• Verify leases, entitlements, and other assignment documents

Tenant/Lease Matters

• Obtain current Certified Rent Roll

• Receive/ review leases and all related documents with attorney

• Review cost pools and expenses pass-throughs

• Review sales reports, aged receivables, and security deposits

Financial Matters

• Review historical and pro forma financial information

• Review utility bills and tax statements

• Review expenses and budget report

Service Contracts

• Review service contracts and verify they are terminable without a fee

• Approve contracts that will be transferred

Litigation

• Review litigation list

Insurance

• Obtain insurance quotes

• Provide risk management information and certificate of insurance

Property Inspection

• Review all property plans and inspection reports

• Order engineering report

• Verify parking

• Review building permits and licenses

• Review energy consumption

• Review warranties

• Site plans, maps, photographs, and leasing brochures

Governmental Review

• Review licenses and permits

• Proper zoning letters

• No pending administrative proceedings or governmental plans

Closing and Miscellaneous

• Notify seller of anything that is misrepresented during the due diligence review

• Estimate repair costs

• Initiate all changes in closing documents

• Confirm all prorations for taxes, utilities, rents, permits, license fees, utilities, operating accounts, security deposits, closing costs, commissions, tenant improvements, and other expenses.

• Title costs

• Schedule of estimated closing costs

• Tenant Notices

• Purchase contract

• Review closing statement

• Disbursement of funds

Property Operations and Management

• Choose property management company

• Finalize property agreements

• Select leasing company

• Review warranties

There are several additional elements of due diligence. Your commercial lender can provide additional information related to due diligence and which items pertain to your property.