Due Diligence

A due diligence period is negotiated at the letter-of-intent or purchase-agreement stage and typically runs 30–90 days for commercial property, longer for complex or regulated assets. During this window the buyer reviews title, survey, environmental reports (often a Phase I, and a Phase II if the Phase I flags recognized environmental conditions), zoning compliance, existing leases and estoppels, service contracts, and physical condition, and can typically terminate and recover its earnest deposit if the findings are unsatisfactory.

For income-producing property, diligence extends into financial verification: reviewing actual operating statements against the seller's pro forma, confirming CAM reconciliations, and obtaining estoppel certificates from tenants that confirm lease terms independently of what the seller represents.

Cannabis and distressed transactions extend the standard diligence checklist meaningfully: license transferability and CRA approval timing, municipal opt-in and buffer-zone verification, METRC inventory reconciliation, and — in receivership sales — court approval procedures all add steps that do not exist in a conventional commercial deal, which is why diligence periods on those deals typically run longer than the conventional 30–60 day norm.