Discover more about our industry & what we do

The Property Acquisition Process

by Haidee Rowe on 27th May 2015

What is Purchaser’s planned use of the Property?


Does the physical condition of the Property permit use as planned?

  • Commercially adequate access to public streets and beyond
  • Sufficient parking and parking zones
  • Structural condition of improvements
  • Environmental contamination type as it is always present

Is there any legal restriction to Purchaser’s use of the Property as planned?

  • Zoning and planning policy
  • Private land use controls and operational restrictions
  • Discrimination and Disabilities Act
  • Availability of licenses

How much does Purchaser expect to pay for the property (Leasehold/Freehold/Long Lease)


Is there any condition on or within the Property that is likely to increase Purchaser’s effective cost to acquire or use the Property

  • Property owner’s assessments
  • Business Rates in line with value
  • Service Charges
  • Drainage, treatment plants and consents
  • Access, noise levels, ventilation and dust
  • Parking, Communal Lighting, security and Landscaping

Any encroachments onto the Property, or from the Property onto other lands


Are there any encumbrances on the Property that will not be cleared?

  • Easements/Covenants running with the Land
  • Maintenance Obligations, schedule of condition and dilapidations


  • Security Deposits
  • Options to Extend Term
  • Options to Purchase
  • Rights of First Refusal or First Offer
  • Maintenance Obligations, schedule of condition and dilapidations
  • Duty on Landlord to provide utilities
  • Business Rates up to date
  • Delinquent rent (is there a tenant going bust?)
  • Pre-Paid rent
  • Tenant mix/use controls
  • Tenant exclusives
  • Tenant parking requirements
  • Break Clauses
  • Other material Lease terms

New Construction?

  • Availability of building control certificates
  • Utilities capacity, changes planned and use
  • Environment Permit
  • Warranties and rights first/second sale
  • Design quality and designer
  • Build quality and builder
  • Building Manual and Safety Manual

2) The Seller


Who is the Seller?

  • Individual
  • Trust
  • Partnership
  • Corporation
  • Limited Liability Company
  • Other legally existing entity

If other than natural person, does Seller validly exist and is Seller in good standing?


Does Seller own the Property?


Does Seller have authority to convey the Property?

  • Board of Director Approvals
  • Shareholder or Member approval
  • Other consents
  • If foreign individual or entity, are any special requirements applicable

Who has authority for the Seller?


Are sale proceeds sufficient to pay off all liens?


3) The Purchaser

Who is the Purchaser?

What is the Purchaser/Grantee’s exact legal name?

If Purchaser/Grantee is an entity, has it been validly created and is it in good standing?

  • Articles of Incorporation – Articles of Organisation
  • Certificate of Good Standing

Is Purchaser/Grantee authorised to own and operate the Property and, if applicable, finance acquisition of the Property?

  • Board of Director Approvals?
  • Shareholder or Member approval?
  • If foreign individual or entity, are any special requirements applicable?
  • Qualification to do business in jurisdiction of the Property?

Who is authorised to bind the Purchaser/Grantee?


4) Conclusion 

Conducting an effective investigation in a commercial property acquisition to discover all material facts and conditions affecting the Property and the transaction is of critical importance.

The existence of these factors and their effect on a Purchaser’s ability to use the Property for its intended use and on the Purchaser’s projected investment yield can only be discovered through diligent investigation and attention to detail.

The circumstances of the transaction will determine what degree of diligence is required. The level of diligence required under the circumstances is the diligence that is due.


Haidee RoweThe Property Acquisition Process