Recommended Commercial Real Estate Inspection and Due Diligence

A list of recommended inspection and due diligence to satisfy any concerns a buyer may have as to the physical condition of the commercial property.

Furthermore a buyer is urged to employ competent, licensed professionals to preform inspections of all conditions of the commercial property.

  • Physical Inspection – This inspection may reveal unknown conditions. This is a visual inspection. The inspector does not look behind walls or under carpets or take equipment apart. However a professional inspector is trained to seek out certain conditions, which may reveal aspects of the physical condition of the property not recognized by the untrained human eye. It is recommended that the buyer avoid having a friend or relative, who happens to be a “handy man” do the inspection rather than use a professional.


  • Roof Inspection – This inspection should reveal the present condition of the roof, past or current leaks, and the approximate remaining life of the roof. However, any conditions, past or current, that are not visible to the inspector may not be contained in the inspection report. It is recommended that the buyer have the roof inspected by a licensed contractor.


  • Mold Inspection – Mold is a common element in many buildings. Along with the other inspections you also have the right to to have the property inspected for mold, mildew, spores and airborne bacteria.


  • Environmental Inspection – It is also recommended the buyer order an environmental inspection by a qualified expert. Such inspection may reveal conditions, which may be hazardous to human health, and determine if the property is in compliance with the sate of Arizona and U.S. Environmental rules and laws.


  • Soils/geological/structural Inspection – Licensed Geo technical Engineers can reveal if the soil and terrain of the property is susceptible to damage, expansion, contraction, settlement, slippage, subsidence or other conditions. Such inspection can determine if the property may be constructed on filled or improperly compacted soil. This inspection by a licensed, qualified professional is strongly recommended to determine the structural integrity and safety of all improvements on the property. Buyer is advised that some lenders may require inspection by a structural engineer or other expert prior to funding a loan. There are abandoned and active oil and gas fields and toxic waste sites throughout the United States, which may be located at or in the vicinity of the property. A qualified Environmental Inspector may be qualified to perform these services also.


  • Septic Inspection – If the property is not on a city or similar sewer system, this inspection is strongly recommended to be order to reveal the condition of the septic system.


  • Permits and Zoning – Whether permits, commercial building code compliance, and/or zoning clearances were obtained for the construction of any improvements, alterations, modifications or remodeling of the property is unknown to the agent and broker. Whether such construction was performed by the present or previous owner(s) and whether performed by a licensed or unlicensed contractor is unknown to the agent and brokers. The buyer is advised to investigate these matters. Permits, certificates of occupancy and commercial building code violations may be obtained by a search of the public records at the department of building safety (or similar entity of the applicable municipality) or from an inspection service company that provides such information for a fee. If there are any structural additions on the property for which a permit or certificate of occupancy was not obtained or which are not in compliance with applicable codes and other laws. Buyer may be required to incur expenses after the close of escrow to bring the property up to current codes and other applicable laws or to demolish the subject additions. Broker and Agents make no representations as to any permits or certificates of occupancy for the property, regardless of whether provided by the department of building and safety (or similar entity) or another source. Broker and Agent are not qualified to interpret or explain permits, commercial building codes, uses or certificates of occupancy. Buyer should consult with his or her own inspectors or other professional advisers and appropriate government authorities regarding permits, commercial building code compliance, and/or zoning clearances.


  • Square Footage, Lot Size and Boundary Lines – Buyer is aware that the square footage, lot size and boundary lines, represented on the multiple listing and/or other advertisements are approximate figures. The property has not been taped or surveyed for accurate square footage, lot size or boundary lines. The dimensions contained in the legal description of the property may not equal the actual area of the property, and the actual area has not been verified. To determine these issues, the buyer is advised and urged to employ a licensed civil engineer, appraiser and/or surveyor of the buyer/tenant’s choice. It is understood by the parties that upon removal of the contingency(s) to the purchase contract for inspections of the property, the buyer will be accepting the square footage, lot size and boundary lines that actually exist.

A buyer must realize and acknowledge that a commercial real estate agent and/or broker cannot guarantee the conditions of the property or be responsible for any defects to the property, identify property boundary lines, provide legal or tax advice.
It is strongly advised  the buyer will seek legal, tax, accounting and other desired assistance from appropriate professionals.

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