Due Diligence is an evaluation, analysis, process, or simply an objective, that seeks to ensure that a party to a transaction is fully aware of the related background, that material facts are verified, and that explicit and/or implicit risks are identified. Due diligence is a common task undertaken before entering into agreements and investments, and can be conducted by either party or both parties involved in a transaction. The intent of due diligence is typically more than just disclosure, it is conducted to reduce the possibility of harm or damage that may occur as a result of a transaction.
Due Diligence of Executory Contracts and Leases in Connection with Property Transactions
As part of due diligence for property transactions, executory contracts and leases become essential information. It is important to determine from experienced vendors the additional items, issues, and operating problems that should be reconciled prior to closing. Listed below are a number of examples of executory contracts and leases typical to many real estate transactions:
Parking lot
Road sweeping
Parking management agreement
Pool maintenance
Exterior grounds maintenance
Television maintenance
Pest control
Window cleaning
Security services agreement
Computer maintenance
Reservations system
Music maintenance
Security services
Telephone hardware maintenance
Accounting system maintenance
Copying machine maintenance
Copying machine lease
Postage machine
Fire extinguisher service
Elevator maintenance
Long distance services
Pay phone vendors
ATM vendors
Emergency generator maintenance
Phone switch
Leasing agreements
Hotel trade-out agreements
Advance booking agreements
Equipment leases
Commission or agency agreements
Business licenses
Municipal permits, various
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Stonecreek Partners Resource pages are provided freely and without limitation for personal, private, non-commercial use, and may be linked to as a source page. All resource page information is based on 30 years of practitioner's experience of Stonecreek Partners' principals, in the retail, entertainment, hotel, residential, and commercial real estate industries.
