Inspections and Due Diligence

We help our clients implement their legal and business objectives. When a buyer wishes to buy real property in California, whether it is raw land, a single family residence or a commercial development, the key to a successful transaction is due diligence. The various areas where due diligence is required varies on the type of transaction but these are some of the critical areas that should be investigated:

CC&Rs and Common Interest Development Issues. If the preliminary title report indicates that a property is subject to Covenants, Conditions and Restrictions (CC&Rs) of a common interest development it is important to have a legal professional review those documents before you purchase the property. It is quite possible that those CC&Rs contain provisions that would not be acceptable to you or the Homeowners’ Association is contemplating a large special assessment that will cause you an unanticipated expense.

Easements and Other Title Documents. Each document that appears on a preliminary title report should be reviewed. Easements in particular should be reviewed so that problems do not arise in the future. Who will have access to the property if you go through with the purchase? Is there a potential for disputes with adjoining land owners? Does the property have adequate ingress and egress for your current needs or for future development? Will you be able to make additions to the property without violating a pre-existing easement? These are just a few of the questions that can arise when easements or other title issues arise.

Leases and Estoppel Certificates. When purchasing rental properties it is important to have an attorney carefully review the leases to make sure they are enforceable and have no problematic provisions that may arise in the future. It is critical to obtain proper estoppels certificates that will alert you to potential problems and tenant complaints.

Soils Inspection. Soils inspections are performed and made a contingency for several reasons. In hillside areas in particular soils reports should be obtained to make sure there is no danger of erosion and mud slides. In industrial areas soils should be tested to make sure there are no toxic or other dangerous conditions that could lead to potential liability in the future.

Surveys and Boundaries. It is generally advisable to double check boundaries and have a survey performed if there is any questions whatsoever about a property’s boundaries. One of the most common types of real estate litigation is adjoining landowner litigation which arises when an owner learns that a neighbor is encroaching upon their property.

Termite Inspections. Termite reports and inspections are part of every standard residential purchase and sale agreement and should be seriously considered whenever you purchase a property containing a structure.