612-332-6600 | Toll free: 888-655-1031

Due Diligence Documentation Checklist
Minnesota Commercial Real Estate

.Long check list | Short check list

Full Check List

  1. Copies of all records, instruments, licenses, permits, repOlts, ~ttidies and agreements in Seller's possession which affect the ownership or operation of the Property in any material respect. This shall include but not be limited to environmental, structural, hazardous waste, licenses, certificate of occupancy, etc.

  2. Copies of all Service and Construction Contracts with conflffilation they all are in full force and effect and not in default. As to each contract, Seller shall indicate the provisions for cancellation. As to the Construction Contracts, copies of any applicable building permits and governmental compliances.

  3. An inventory of Personal Property.

  4. Copies of all Space Leases for the Property, pending and executed. This shall include any billboard leases or parking leases or ground leases, if any.

  5. A rent roll for the PropeIty as of or subsequent to the date of the purchase agreement and showing each unit of the space, the tenant name, unit name, unit number, annual rent, security deposit held, any defaults in any Space Lease and expiration date of each Space Lease. Include listing of all tenants and their respective business descriptions.

  6. Historical occupancy over the past three years.

  7. Listing and description of current new leases or renewal leases in process.

  8. Copies of any pertinent tenant correspondence.

  9. Insurance information for the PropeIty, including type and limits of coverage currently in place and the premiums paid by Seller therefore.

  10. Architectural drawings and plans and speciflcations for the Improvements, which are in the possession of the Seller, including CAD drawings.

  11. Financial information for the PropeIty, in summary form, for the years of _ _ , __, __ and current year (broken down by months for current year). This shall include operating budgets, balance sheets, cash flow statements and any financial data pertinent to the analysis of the Property.

  12. A list of all pending or, to the knowledge of Seller, threatened litigation or arbitration proceedings wherein Seller is defendant or which affect the operation of the Property or which involve both Seller and any current tenant of the PropeIty.

  13. A summary of all capital expeuditw'es made by Seller during the last three full calendar years and year-to-date for _________.

  14. A list of all claims made during the last three full calendar years and year-to-date for current year under insurance policies covering the Property.

  15. Copies of any marketing or demographic infOimation

  16. Original photos of the building, including intetior and extetior.

  17. Copies of tenant financials for major tenants.

  18. Last six months of tenant billings and receipts in detail and copies of the monthly tenant delinquency reports for the past six months.

  19. Copies of any operating expense or real estate tax pass-through reconciliations for the last two years and the current year. Tenant improvement repayment schedules (details of all including amortization), and documentation of tenant improvements (uncompleted, unpaid and contingent)

    .
  20. Copy of the leasing commission and management agreement, which includes any potential future obligations to pay commissions, management fees, brokerage fees or any other types of fees.

  21. UCC Search prepared within thirty (30) days of purchase agreement (and re-certified at closing).

  22. Copy zoning letter and certification that building complies with all governmental zoning laws and other such regulations or laws.

  23. Copy of real estate tax invoices for the last three years, and any property tax reports from assessor or property tax protesting records. Documentation of all remaining special assessments, either levied, pending, deferred or constituting a lien on the Property.

  24. Copies of utilities invoices for the past 12 months, including but not limited to, water, sewer, electricity, gas, steam, chilled water.

  25. Copy of all government licenses and permits (including, but not limited to, elevators and life safety systems). Documentation of compliance with all codes, ordinances and other governmental regulated items.

  26. Copies of all guarantees and warrantees covering the Property.

  27. Copies of all certificates of occupancy.

  28. All documentation, reports and correspondence relating to the Property's environmental condition, including but not limited to :

    • Phase I environmental report dated within ninety (90) days prior to purchase agreement.

    • Phase n environmental report, in the event there are issues raised in the Phase I environmental report that necessitates additional conditions to be studied;

    • Copies of all other environmental reports and correspondence in respect to the Property including but not limited to soil boring testing, water testing and other geotechnical reports;

    • Any correspondence relating with the State of Minnesota Pollution Control Agency or any other governmental entity.

  29. Documentation evidencing any governmental actions relating to the Property.

  30. An ALTA survey showing land and building, all easements, roads, driveways, and identifying the same by recording information; showing all applicable setback lines, showing any encroachments or otherwise meeting ALTA standards, prepared by a surveyor registered under the laws of the State of Minnesota. The survey shall be an ALTA/ACSM urban survey and be certified to the Buyer, Buyer's lender and Buyer's title insurer and the certification language shall be reasonably acceptable to Buyer. The survey shall set for the complete and correct legal description of the Property as shown on the Title Commitment; the location of all recorded easements which are, appurtenant to or border the Property; the location of any unrecorded easements appurtenant to or burdening the Property which are ascertainable by a reasonable inspection of the Property; the location of all improvements on the Property; the location of any improvements encroaching onto the Property from adjacent property; the location of any improvements located on the Property which encroach any adjacent property; the location of all adjoining public streets, roads, highways and alleys; the location of all public access to the Property; the street addresses of all existing improvements, if known; interior parcel boundaries, if any; all applicable municipal setback lines; the location of on­site utilities and services lines for natural gas, electricity, water and sanitary· and storm sewers; zoning; flood district. designation; the square foot area of the Property, and the square foot area of all easements burdening the Property.

  31. An ALTA Form Owner's Policy of Title insurance insuring title to the Real Property. The Commitment will be accompanied by legible copies of all recorded documents affecting the Property.The Commitment will also contain proper searches covering UCC filings in respect to the property, bankruptcies, federal and state judgments and liens, federal tax liens, special assessment searches from municipalities in which the Property is located indicating levied special assessments.

  32. Assessment relating to the Property's compliance with the Americans with Disabilities Act and documentation relating to the Property's compliance with IAQ guidelines and regulations.

  33. Any obligations on the part of the Seller as it relates to employment or union contracts, including employee salaries and benefits (itemized by employee).

  34. History of major repairs to the Property infrastructure (including but not limited to structure, HY AC, roof, elevators, mechanical equipment, parking lot) during the past three years and copies of preventative maintenance records for the past year.

  35. Such other documents and information as Buyer may reasonably request in connection with its inspection of the Property and the documents relating thereto.

 

Short Check List

 

Due Diligence Documentation Checklist - Short

1-ADA Assessment
2-Aged Accounts Receivable(current and last 2 months)
3-Building permit(s)
4-Capital Expenditures(for the past 36 months)
5-Certificants of Occupancy (shell building(s) and each tenant)
6-Contact List (Seller)
7-Correspondence (from the lease files)
8-Employee Salaries and Benefits(itemized by employee)
9-Enviormental, Property Physical Condition, Seismic, Soils or similar reports
10-Govermental Authority Notices
11-Insurance Policies (tenant liability)
12-Leases(pending and executed)
13-Lease (standard form)
14- Lease Commissions (unpaid)
15- License commissions (unpaid)
16-Litigation or Disputes (recent or pending)
17- Loan Documentation
18-Operating Budget
19-Operating Statements (past 36 months)
20-Operations and maintenance manual
21-Personal Property (listing of all items to be transferred at closing)
22-Plans, Specifications, CAD Drawings
23-Rent Roll
24-Service Contracts
25-Site Plan
26-Survey (ALTA as-built)
27-Tax Statements 9past 24 months)
28-Tenant Financial Information
29-Tenant Improvement Repayment Schedules(details of all including amort.)
30-Tenant Improvements(uncompleted, unpaid and contingent)
31-Tenant Reimbursement Reconciliation (last year’s and y/t/d true-up)
32-Title Insurance (preliminary report pr Commitment and copies of executions)
33-Utility Deposits(listing)
34-Warranty Documents (existing for roof, mechanical, etc.)
35-Zonign Information (any existing information)