Commercial Property Due Diligence Checklist

Due diligence is where you find out what you are really buying. Skipping it is how buyers inherit problems. This is the landlord's checklist.

Title and legal

• Title: ownership, rights of way, covenants and any charges.
• Rights over land: easements and wayleaves benefiting or burdening the site, and rights of light if you may develop.
• Searches: local authority, environmental, water and drainage, and others as relevant.
• CPSE enquiries: the standard commercial property enquiries the seller answers.

The building

• Survey: a building survey appropriate to the age and type.
• Asbestos: for pre-2000 buildings, check the asbestos position.
• Services: electrics (EICR), heating, and any plant.

Tenancy and income

• Lease review: term, rent, reviews, break clauses, repairing obligations and security of tenure.
• Tenant covenant: is the tenant financially sound?
• Arrears and disputes: any current issues.

Rates, EPC, planning, VAT

• Business rates: the rateable value and any reliefs.
• EPC and MEES: is the rating lettable?
• Planning: the permitted use and any conditions or breaches.
• VAT: has the seller opted to tax, and is a TOGC available?

Use advisers

Your solicitor and surveyor drive most of this. Build the findings into your price and your decision.

What does commercial due diligence cover?

Title and searches, the CPSE enquiries, a building survey, asbestos and services, the lease and tenant, and business rates, EPC, planning and VAT.

Why does the lease matter in due diligence?

On a tenanted purchase the lease drives your income, so review the term, rent, reviews, breaks, repairs and any security of tenure.