Template — for guidance only. These documents are starting points, not legal advice. For legally binding agreements or formal notices, have a solicitor review before use. Drafted for England & Wales. Requirements change — verify current requirements before use.

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Commercial Property Due Diligence

A comprehensive pre-purchase checklist for commercial property investors. Covers legal, planning, environmental, structural, financial, and exit strategy — 36 items across 6 categories.

Deal Details

£

🚨 Do not exchange contracts until all critical items are resolved

28 critical items outstanding. Critical items are marked with a red border.

⚖️ Title & Legal0/8

Confirm property is registered at Land Registry

Critical

Download the title register from gov.uk (£3). Check the registered owner matches the seller. Note any restrictions, charges, or cautions on the title.

Title class — confirm 'Absolute' (not Possessory or Qualified)

Critical

Absolute freehold or leasehold title is standard. Possessory or Qualified title indicates a defect in the title history — seek legal advice before proceeding.

Check all charges and mortgages registered

Critical

Any outstanding mortgages or legal charges must be discharged on completion. Confirm with the seller's solicitor that all charges will be cleared.

Review all restrictive covenants

Critical

Covenants may restrict use (e.g. no retail, no alterations, no HMO). Check these against your intended use. Some covenants are unenforceable but require legal opinion. Budget for indemnity insurance if needed.

Review easements and rights of way

Critical

Check for rights of way over the property (footpaths, drainage, services). Also confirm you have all necessary rights over adjacent land (access routes, utility connections).

Verify boundaries match physical reality

Title plan boundary lines are indicative only. Walk the boundary against the title plan. Disputes with neighbours over boundaries are expensive and slow — identify issues before exchange.

Commission all standard legal searches

Critical

Local authority search (planning history, road adoption, enforcement notices), drainage search, environmental search, chancel repair liability search, coal/mining search if relevant. Budget £350–600.

Check for Section 106 obligations

S106 agreements bind the land (not just the current owner). Obligations may include affordable housing contributions, CIL payments, infrastructure bonds, or restrictions on occupation.

🏗️ Planning & Permitted Use0/6

Confirm current lawful use class

Critical

Check the planning use class (Use Classes Order 2020): C3 (dwelling), E (commercial/office/retail), C4 (HMO), Sui Generis. Any use outside the lawful class requires planning permission.

Review full planning history on LPA website

Critical

Access via the local planning authority's online planning portal. Look for refused applications, enforcement notices, Article 4 directions, and conditions on any permissions granted.

Check for Article 4 Directions restricting PD rights

Critical

Article 4 Directions remove permitted development rights. Common in conservation areas and some residential areas (removing rights to convert to HMO). Check with the LPA.

Check conservation area / listed building status

Works requiring consent are far broader in conservation areas and on listed buildings. Budget for specialist architects and higher costs. Check Historic England's National Heritage List.

Review local plan for surrounding area

Check the local development plan for major infrastructure projects, rezoning, road schemes, or allocated development sites near the property. Access via the LPA website.

Verify any consents granted have been lawfully implemented

Critical

Planning permissions that have not been commenced within their time limit have lapsed. Check commencement and completion of any extensions, conversions, or changes of use.

🌱 Environmental0/5

Commission Phase 1 Environmental Assessment

Critical

A desktop study of the site history, historical maps, and nearby land uses. Required by most commercial lenders. If risk is identified, commission a Phase 2 (intrusive) investigation. Budget £800–2,500 for Phase 1.

Check flood zone and flood risk

Critical

Search Environment Agency flood map (flood-map-for-planning.service.gov.uk). Zone 2 or 3 properties require a flood risk assessment before planning. Check whether current insurance is available and at what cost.

Check for mining, subsidence, or ground instability

Coal Authority interactive map for mining risk. British Geological Survey for natural subsidence risk (particularly in clay-heavy areas). Historic brickworks or other extractive industries can create voids.

Asbestos survey for pre-2000 buildings

Critical

Any commercial building built before 2000 may contain asbestos. A Management Survey is required by law. A Refurbishment/Demolition Survey is required before any structural works.

Check EPC rating and MEES compliance

Critical

Commercial properties must have an EPC rating of E or above to be let (MEES regulations). Planned increase to B by 2030. Factor EPC improvement costs into your budget.

🔨 Physical Condition0/6

Commission a full structural survey

Critical

For commercial property, instruct a chartered building surveyor (RICS). A full building survey identifies all structural defects, maintenance issues, and potential liabilities. Budget £1,500–5,000 depending on size.

Inspect roof covering, drainage, and parapet walls

Critical

Flat roofs, parapet walls, and gutters are common problem areas. Get a roofer's report if the surveyor flags concerns. A roof replacement on a commercial property can cost £30,000–200,000+.

Verify all services connections (gas, electric, water, drainage)

Critical

Confirm all services are connected, legally adopted, and adequate for your intended use. Obtain connection sizes — undersized services may need upgrading at significant cost.

Electrical Installation Condition Report (EICR)

Critical

Required before any commercial letting. Identifies remedial electrical work needed. Budget £400–2,000 depending on building size and complexity.

Fire risk assessment and fire safety compliance

Critical

All commercial buildings require a fire risk assessment by a competent person. Check adequacy of fire detection, suppression, escape routes, and signage against the Regulatory Reform (Fire Safety) Order 2005.

Equality Act / DDA accessibility compliance

Under the Equality Act 2010, reasonable adjustments must be made for disabled access. Assess compliance and budget for any required works — step-free access, hearing loops, accessible facilities.

💷 Financial & Tenancy0/7

Obtain and verify current rent roll

Critical

Get a schedule of all tenants, lease terms, rents, rent-free periods, and break clauses. Verify against actual signed leases — not just what the agent says.

Review all leases in full

Critical

Check: term length, break clauses, rent review mechanism (upward only? RPI? Open market?), service charge obligations, repairing obligations, alienation restrictions, permitted use.

Assess tenant covenant strength

Critical

Research each tenant's financial health. Check Companies House filings, credit ratings, turnover, and profit. A property let to a financially weak tenant is worth less — and risks void periods.

Review service charge accounts (3 years)

Get 3 years of service charge accounts. Check for large one-off expenditures, sinking fund balance, and whether charges are recoverable under the leases. Unexplained deficits are a red flag.

Confirm rent arrears position

Critical

Request a rent arrears schedule. Any arrears at completion become your problem. Negotiate a reduction in price or a rent deposit/retention to cover outstanding amounts.

Estimate capital expenditure requirements in years 1–5

Critical

Based on the building survey and service charge history, estimate major capital works required in the short term (roof, boiler, lift, cladding). Factor these into your offer price.

Check VAT position on the property

Critical

If the seller has opted to tax the property for VAT, the sale is subject to 20% VAT — unless it qualifies as a Transfer of a Going Concern (TOGC). Take specialist advice immediately if VAT is an issue.

🚪 Exit Strategy0/4

Research comparable investment sales

Critical

Obtain comparable evidence of similar properties sold (by yield and capital value per sq ft) in the last 12 months. CoStar, EGi, or a commercial agent can assist. Validates your entry price.

Assess local rental demand for the use class

Critical

What is the void rate for this type of property in this location? Talk to 2–3 local commercial agents. A property with long void risk needs a much higher yield to compensate.

Consider permitted development / planning uplift potential

Is there an angle for permitted development conversion (office to residential, commercial to mixed-use)? Planning uplift can significantly increase exit value if pursued correctly.

Confirm lender appetite before exchange

Critical

Get a credit-approved DIP from your lender before exchanging contracts. Commercial lenders frequently decline or change terms at offer stage based on survey and legal findings.