Legal Due Diligence Checklist for Buying Commercial Real Estate in Washington

Purchasing commercial real estate in Washington is a major investment that involves more than just signing a contract. These transactions can be complicated, with legal, financial, and environmental risks that need to be carefully reviewed before closing. At John L. Davis PLLC in Vancouver, we help commercial property buyers protect their investment by guiding them through every step of the legal due diligence process.

1. Title and Ownership Review

Before anything else, it’s critical to confirm that the seller has the legal right to sell the property. A detailed title search will reveal whether the title is clear or if there are existing liens, encroachments, easements, or unresolved disputes. These issues can cause major problems later if not resolved before closing. A commercial real estate attorney can also assist in obtaining title insurance to guard against hidden risks.

2. Zoning and Land Use Compliance

Zoning laws can significantly impact how the property can be used. You’ll need to verify that your intended use is permitted under the current zoning code and whether any variances or special permits are needed. Development restrictions, local ordinances, and any pending zoning changes should also be evaluated before moving forward.

3. Environmental Assessments

Environmental issues can carry legal and financial liabilities. A Phase I Environmental Site Assessment (ESA) is often required by lenders to identify signs of contamination. If potential risks are found, a Phase II ESA may be needed. Contamination, even from prior owners, could result in costly cleanup obligations—so this step is critical for protecting your interests.

4. Lease and Tenant Analysis (If Applicable)

If the property has tenants, review all active leases carefully. This includes rent amounts, expiration dates, renewal options, and whether tenants have special rights. Estoppel certificates may be requested to confirm the terms with the tenants directly. A detailed rent roll and evaluation of tenant stability will help you understand the income potential and risks.

5. Physical Property Inspection

Hire professionals to inspect the building’s structure, roof, HVAC, plumbing, and electrical systems. You should also check for compliance with the Americans with Disabilities Act (ADA). Repairs or upgrades may be required, and knowing this beforehand allows for better negotiation or planning.

6. Financial and Legal Document Review

Review the purchase and sale agreement closely—especially the financing terms, warranties, and contingencies. It’s also smart to investigate whether the property has been subject to recent litigation, code enforcement, or regulatory issues. A real estate attorney will make sure your contract reflects your best interests and protects you from unnecessary exposure.

7. Tax and Insurance Considerations

Check the property’s tax history, current assessments, and whether a sale might trigger a reassessment. Insurance costs and coverage requirements should also be estimated in advance. These expenses affect your bottom line and should be considered before finalizing the deal.

Due Diligence Matters

A thorough due diligence process helps avoid unpleasant surprises and protects your investment. At John L. Davis PLLC, we offer trusted legal guidance for buyers in Vancouver and throughout Washington. Our team ensures that each deal is thoroughly reviewed so you can move forward with confidence.

Call us today at (360) 597-4740 to discuss how we can support your commercial real estate purchase.

FAQ

Q1: How long does the due diligence period typically last in Washington?

A: Most commercial real estate deals include a 30–60 day due diligence window.

Q2: What legal documents should be reviewed before closing?

A: Sales contract, title report, zoning verification, lease agreements (if applicable), and inspection reports.

Q3: Can a commercial real estate attorney help with negotiations?

A: Yes—attorneys often assist with contract negotiations, risk assessments, and title issues.