Full Definition
Due diligence is the buyer's investigation period to verify every aspect of the property before closing. Commercial due diligence typically includes: Phase I Environmental, Property Condition Assessment, ALTA Survey, title examination, lease review and estoppels, financial audit, zoning verification. Lasts 30-90 days typically.
Related Terms
Phase I Environmental Site Assessment
Records-based investigation to identify potential environmental contamination. Required by virtually every commercial lender.
PCA (Property Condition Assessment)
Commercial building inspection far more comprehensive than residential — evaluates structure, systems, and projects capital expenditures over 10-12 years.
ALTA Survey
The gold-standard land survey for commercial properties — maps boundaries, easements, improvements, and flood zones.
Title Commitment
The title company's preliminary report showing what it will insure — exceptions, liens, easements, and encumbrances.