Due Diligence Inspections: A Vital Necessity for Property Acquisitions

Property Management Blog

Do you have your sights set on an affordable property? Or perhaps, you have recently acquired a conventional building featuring affordable units? Either way, due diligence inspections are a vital and indispensable necessity to ensure affordability and efficiency. Property owners and managers are increasingly focused on curbing the risks of non-compliance.

Preventing a buildup of liabilities is crucial, and inspections can help you save millions of dollars that you will end up paying in penalties and fines. Non-compliance can lead to a scary nightmare of legalities and penalties-a route best avoid by undertaking due diligence inspections.

Ensuring Compliance

Non-compliance is nothing short of a bomb waiting to explode. Receiving an IRS notice of recalled tax credits is a challenging situation, and it is important to note that housing laws are subjected to changes and evolution. A property that was fully compliant with state and local laws a year ago and can be non-compliant after one year. It is a likely possibility because like all legislation, property laws evolve and improve.

It is vital to focus on ensuring compliance and defusing the bomb before it blows up in your face. Pre and post property acquisition processes require due diligence inspections to ensure compliance and prevent the risk of penalties and fines. Buyers are advised to seek out experts who specialize in multifamily due diligence inspections and can provide them a detailed and thorough inspection to rule out all risks and mitigate penalties effectively.

Exploring the Physical Reality

Due diligence inspections serve a wide range of purposes. For instance, they ensure the fiscal well being of a property, facilitate compliance with legalities and paperwork, and ensure that the property is safe and habitable of residents. Aside from being a legally and financially beneficial practice, due diligence inspections serve another crucial purpose: highlight the physical realities of a building.

A physical asset requires thorough and detailed inspections to ensure its cosmetic and structural integrity. Is the building devoid of all kinds of damages that could compromise its structure? Does the building require urgent maintenance or is it well looked after?

A one-year period can bring about numerous changes within a property. It is common for investors to give out money to developers, and developers take the money but never construct the property. It is common for investors to undertake due diligence inspections, only to be surprised that the property is lacking various necessary elements.

Flooding, fire hazards and water damages are common hazards that required detailed and thorough inspections. Developers typically avoid sharing such news with investors and property owners, but an inspection can highlight all such physical realities and apprise the owner with the true physical state of the property. A due diligence inspection is a vital undertaking to avoid staying the dark about your investment and take a proactive approach towards ensuring compliance and tenant safety.

If you intend to rent out a multi-family building and set a healthy stream of passive rental income, a due diligence inspection is a vital strategy. It will help you boost the success of your tenant acquiring strategy and offer superior value, which will naturally result in higher rents and a greater income. The significance of conducting due diligence cannot be stressed enough while investing in a multifamily property. It is instrumental to undertake this inspection before acquiring the asset.

Ensuring Accessibility

When it comes to ensuring compliance with all legal requirements, accessibility is a major factor and it makes a significant difference. Ensuring accessibility for the disabled is the leading feature that can often make properties non-compliant. It has emerged a major focus for governments and businesses, and in the US, failure to comply can result in a hefty $75.000 worth civil penalties.

In 2019 alone, over 24,000 violations of the Americans with Disabilities Act (ADA) were fined, leading to over $116 million collected through civil fines and penalties. If you seek affordability, it is crucial to mitigate noncompliance by ensuring accessibility features and amenities for the disabled.

Due diligence is vital to ensure accessibility, because a parking space can seem pretty accessible from afar but when a disabled individual is using it, problems and challenges can arise. Accessibility landmines are everywhere, and only a thorough inspection can help highlight these spots and ensure compliance.

Most property owners and property managers are blissfully unaware of these issues, which can create grave challenges when it comes to ensuring compliance and attracting tenants. It is pertinent to note here that laws change rapidly, and it is likely that laws on accessibility for the disabled are likely to become more focused and stronger rather than weakening.

It is vital for property owners and managers to remain abreast with legalities and legal norms with regards to accessibility and multifamily building compliance in general. It is interesting to note that state and local legislation is stronger than most federal laws, and it is in the best interest of a property owner to ensure compliance with all legal norms.


A thorough and detailed due diligence process is vital and necessary to ensure safety, accessibility, affordability and an effective decision. As a property investor, you must prioritize affordability, efficiency and higher ROIs, and you can only evaluate these metrics by undertaking a detailed due diligence inspection. An inspection will quickly highlight all the shortcomings of a property and offer valuable insights into the structural and cosmetic integrity of a property.

Needless to say, such an inspection will also prove immensely valuable on the negotiating table. If the inspection report highlights multiple damages, the investor can also negotiate to drive down the price, providing that he/she is willing to invest on renovations and restorations.

Due diligence not only makes the complexities of compliance easier and simpler, but it also ensures that a property owner has a keen eye on every single aspect of the newly acquired property. Many investors who prioritize affordability often shy away from the cost of a due diligence inspection, but rest assured, this cost is absolutely worth it.

If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.

Property Management Service Areas

Palm Coast Property ManagementFlagler Beach Property Management
Ormond Beach Property ManagementSt. Augustine Property Management
Daytona Beach Property ManagementSt. Augustine Beach Property Management
Holly Hill Property ManagementPort Orange Property Management
Blog Home