In the world of real estate law, much is made of the legal disclaimer “caveat emptor,” the Latin phrase meaning “let the buyer beware.” In many jurisdictions, this legal standard place the responsibility on potential buyers for conducting their own due diligence for a real estate acquisition. Sellers rarely are responsible for problems that the buyer(s) encounters once the sale is complete so long as they did not fail to disclose a material fact or make a fraudulent misrepresentation.
In most standard real estate transactions, a due diligence period follows the signing of the purchase and sale agreement, which allows a reasonable amount of time for a buyer to research the property’s history, schedule experts to come to the site, inspect all aspects of the property and prepare written reports.
While it’s prudent for a buyer to be wary in any real estate transaction – certainly there may be hidden dangers on the path ahead – caution is not enough. Rather, a buyer should be conscious of key details of the property and its immediate surroundings, exercise sound judgement when hiring and questioning experts and review thoroughly the actual work product of said experts during the due-diligence period.
In most standard real estate transactions, a due diligence period follows the signing of the purchase and sale agreement, which allows a reasonable amount of time for a buyer to research the property’s history, schedule experts to come to the site, inspect all aspects of the property and prepare written reports.
Case in point: a client called a couple of years ago to complain that the driveway by which he and his tenants (and their customers) accessed his commercial property – said driveway being the primary ingress/egress for the past 60-plus years – was unceremoniously blocked one morning by a locked metal chain. The culprit? The new owner of the next-door property.
Their position? “Well, it’s our property now and we can do as we choose….
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