Page 147 - Trump University Commercial Real Estate 101

Ho w to Disco ver the Truth behind a Deal

Don ’ t do this any earlier, because good attorneys are expensive.
They will either ask you for a portion of their fee up front, or they may
be okay with waiting to be paid at the closing. Either way, the billing
meter will start to run now.
Legal due diligence involves reviewing the following:

• Title
• Building code violations
• Zoning certifi cates
• Insurance
• Rental ordinances
• Licenses, certificate of occupancy, and other permits

• Vendor contracts
• Estoppels
• Title inspection

Your attorney or title company will review the ownership chain of
the property. That involves examining the property deed and many
dusty documents in the county registrar ’ s offi ce. She ’ s searching for
any liens, judgments, easements, or encroachments that could affect
the use and value of the property.
When a title is clouded, it means that some past owner or vendor
has a dispute. These issues are not always major, but they do have to be
remedied. Regardless of any assurances from the seller, never accept a
property with a defective title.

Building Code Violations

Always check with the city or town for violations of building or health
codes. You will be responsible for these violations as soon as you take
ownership of the property.
As with everything else, sometimes these violations are major and
other times they are quickly resolved. Their magnitude will determine
whether you ask the seller to reimburse you in the form of a repair
allowance.
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