What's Due Diligence?

Before buyers sign a contract to purchase an apartment, their attorney performs an important task called "due diligence." The purpose is to uncover any current or potential problems or issues with the building and the apartment. These could be things like assessments, lawsuits, or conflicts between neighbors.

The attorney will review the building's offering plan and amendments and last couple of years' financials and board minutes, and send a questionnaire to the building's managing agent.  That last bit can take the most time, since managing agents are usually pretty swamped.

When due diligence is complete, the attorney will discuss their findings with the potential buyers.  They'll also point out positives, like if a building handles its finances responsibly. 

The buyers may or may not decide to sign the contract and move forward with the purchase depending on what they've learned.  

Once we discovered a seller was selling because he'd gotten into a fight over noise with his downstairs neighbor, who stabbed him. The buyer reconsidered.