A property may look commercially attractive while its legal position is incomplete, restricted or inconsistent with the buyer’s plan. Due diligence connects the physical asset to the rights and documents that make it usable.
The goal is not simply to collect certificates and agreements. The goal is to test whether the rights, boundaries, access, approvals, contractual commitments and proposed use are consistent with one another.
1. Identify the right being acquired
Start by defining precisely what the transaction gives the buyer or investor. The review should confirm the relevant land rights, registered holder, duration, location and supporting documentation, as well as any limitations or third-party interests.
2. Compare documents with physical reality
Maps, boundaries, access routes, occupation and existing structures should be considered alongside the formal records. Any difference between documentation and actual conditions can affect timing, use, financing and dispute risk.
3. Test the intended use
A buyer should not assume that a property can be used exactly as planned. Legal review should consider the intended development or operation, the approvals and documentation needed, and any restrictions or project dependencies that could prevent the plan from moving forward.
4. Review contracts and stakeholder relationships
Existing leases, development agreements, contractor arrangements, financing documents, management agreements or commitments to third parties may continue to affect the asset after completion. Their rights, obligations and termination provisions need to be understood.
5. Build protection into the transaction
Material findings should be addressed through the transaction structure. Options may include pre-completion actions, conditions, document delivery requirements, representations, indemnities, price adjustments or a decision not to proceed until an issue is resolved.