As exciting as it may be to finally acquire a property ideal for your business or investment needs, do not be in a rush to close the deal without conducting proper due diligence. Before completing a Florida commercial real estate transaction, its important for the buyer to perform a thorough due diligence investigation, ensuring the property is in good condition, is suitable for buyer’s needs, and is free of legal or financial issues.
A Florida commercial real estate attorney can help you cover these grounds before signing the contract. When searching for a reliable real estate lawyer in Florida, this article will discuss the types of Commercial Real Estate (CRE) due diligence to perform and the must-have document checklist for conducting due diligence in Florida.
Types of Commercial Real Estate Due Diligence to Perform in Florida
Commercial real estate contracts carry a heavy weight due to the monetary investment and the liability you incur if things go wrong. Knowing the types of CRE due diligence to perform is a crucial step in acquiring a property. The following table summarizes the types of due diligence and requirements involved.
| Type of Due Diligence | Requirements |
| Physical | Check the internal and external state of the property and ask the seller to disclose pending issues. |
| Legal | Perform a title search to check for judgments, mortgages, and liens. Obtain title insurance at closing to protect your title interest in the property. |
| Financial | Review income and expense documents, including utility statements, service contracts, and rent rolls. |
| Tenant | Examine the occupancy rate, tenant responsibilities, current tenant history, and lease terms. |
| Environmental | Assess the current environmental risks surrounding the property and the restrictions it may have. |
| Market | Analyze the current local market as you compare your property with other properties. Check the possible future trends. |
| Use/Zoning | Make sure your intended use of the property is aligned with city and county use and zoning regulations. |
Conducting this process can be overwhelming. Farshchian Law, P.A., a Florida commercial real estate law firm, can help you to efficiently perform your legal due diligence within the stated time period, and connect you with other professionals to assist with the various aspects of the due diligence process.
A Must-Have Due Diligence Document Checklist in Florida
An important aspect of due diligence is to verify, verify, verify. The following are the documents you should consider having on your due diligence checklist for your CRE contract:
- Recent title policy to ensure the property doesn’t have pending liens
- Precise legal description of the property
- A recent survey and topographic study noting the property’s physical features and boundaries
- Declarations of covenants, conditions, and restrictions (CC&R) providing information on the rules and regulations over the property
- Zoning compliance certificate confirming the property’s zoning and use restrictions
- Environmental reports to ensure avoidance of environmental contamination and hazards
- Previous real estate tax bills to explore the tax history and any pending issues; an opinion from the local property appraiser’s office on future tax liability
- Historical operating expenses that relate to the property’s operations and maintenance
- Existing insurance policies
- Rent rolls and lease agreements
- Ongoing service contracts about the property’s operations and maintenance
- Records of all tenants’ security deposit
- Building Certifications/Recertifications for properties in Miami-Dade and Broward
How Our Florida Attorneys Can Help
Do not leave any stone unturned for your Florida commercial real estate purchase. Let Farshchian Law’s real estate team help you. We will strive to protect you from any legal or financial harm as you undergo your commercial real estate transaction in Florida. Email us today or call us at 1-855-513-5880. We provide closing, real estate, and title and deed transfer services throughout the State of Florida.