Legal due diligence of VDR real estate is the first and important step in any transaction, in particular when concluding a successful rental transaction.
What Are the VDR Needs for the Real Estate Industry?
The size of the company is not critical for attracting the VDR real estate industry. Many participants in this market invest in small firms with annual revenues of less than a few million dollars. It is desirable that the company does not have debts and other encumbrances have documents confirming ownership of assets, the necessary patents, and licenses. Investors most often negatively assess the presence of the state or criminal structures among the owners of companies, and the participation of the firm in corporate conflicts.
Why is this necessary if the property is not purchased, but leased? Commercial real estate tenants are primarily interested in a long-term stay in the desired facility, since large sums of money are invested in repairs, and advertising and marketing campaigns are being developed, including the recognition of the facility among clients. Therefore, the lack of legal rights to transfer premises for lease or illegal acquisition of an object may result in early termination of the lease agreement.
For the exchange of files, virtual data room invitations sent by mail are used. By setting up sharing, you can assign people different roles: some can only view files, others can make changes to them and add new files to folders, and still others can also invite new users.
The VDR reals estate include:
- Professional tools for modeling, changing and monitoring processes.
- Access to technology to manage unstructured processes.
- Clear and transparent workflows from the very first day of using the system.
- Management of front-, middle- and back-office processes in a single environment.
- Advanced analytics on the effectiveness of sales, marketing, service, operational processes.
- Rapid exchange of information throughout the company thanks to integration into a single IT ecosystem of the enterprise.
- Scalability, security, and mobile access.
- Advanced tools for better communication between departments and consumers.
Due Diligence in Commercial Real Estate Transactions
Due diligence in commercial real estate transactions is a comprehensive check of real estate, which is carried out before buying or renting it. Within the framework of this procedure, legal, financial, tax and construction, and technical expertise can be carried out, assessment and identification of potential risks when concluding a specific transaction are carried out. A successful and high-quality due diligence of real estate increases the attractiveness of the transaction object for buyers or investors and reduces the risks when buying.
To estimate the cost of the project, it is necessary to obtain input data and technical characteristics from the side of the customer. This may include information about what systems are used when working with documents or important data, how business processes are built in the company, what main tasks need to be closed. At the same time, VDR specialists, with their expertise and understanding of technological risks, are ready to help with the preparation of a detailed calculation.
It is also important to check the accounting documents and make sure that the property is on the balance sheet of the legal entity. These are just a few important nuances, of which there are actually much more, and in practice, in the verification of each commercial property, a variety of additional documents arise that require a qualified analysis.