Due diligence and reporting

Due diligence is required whenever a buyer (or tenant) is proposing to purchase:

•
an interest in land, eg a freehold or leasehold property (including entering into a new lease)
•
an option to purchase an interest in land
•
a right of pre-emption in respect of an interest in land, or
•
a company, whose assets include one of the above

What does due diligence involve?

Due diligence is the process by which information about the proposed purchase is collated and assessed. It enables a buyer to check what they are purchasing and that they are paying the right price for it. Ultimately, the due diligence exercise should provide the buyer with the information they need to make an informed decision as to whether to proceed with the purchase and on what terms.

Where the purchase is being funded by a lender, the lender will also require due diligence to be carried out to enable the lender to check that the property is acceptable security.

Legal due diligence involves investigation of:

•
the seller’s title to the property (or interest) to ensure that the buyer will

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