Due Diligence Period in Contract Information
Due diligence includes: physical inspection (home inspection, roof inspection, pest inspection, and specialized inspections), title examination (reviewing the title commitment for defects and encumbrances), survey review (verifying boundaries, encroachments, and easements), environmental investigation (Phase I ESA, radon testing, and mold inspection), zoning verification (confirming the property's zoning compliance and permitted uses), and financial review (for income properties: reviewing rent rolls, leases, operating statements, and tax returns).
Florida Legal Definition
Due diligence periods in Florida are governed by: the purchase contract terms. Under the Florida Bar/FAR contract: the inspection period is typically 10-15 days (for residential), and 30-60 days (for commercial, negotiable). During the due diligence period: the buyer has the right to inspect and investigate, the buyer may terminate the contract within the period (typically with refund of earnest money), and the buyer's failure to terminate within the period may waive the contingency.
How It's Used in Practice
Attorneys manage due diligence for buyers and sellers. For buyers, the attorney: coordinates all inspections and investigations, reviews the title commitment and survey, evaluates environmental reports, analyzes the zoning compliance, reviews financial performance (for income properties), and exercises termination rights if findings are unsatisfactory. For sellers, the attorney: responds to buyer's requests, negotiates repair credits, and monitors the due diligence deadline.
Key Takeaways
- Due diligence: buyer investigates before committing.
- Residential: 10-15 days; commercial: 30-60 days (negotiable).
- Includes: inspection, title, survey, environmental, zoning, and financial.
- Failure to terminate within period may waive contingency.
- Coordinate all investigations early to meet deadline.
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Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC