Due diligence

17 augustus 2023

Research into potential issues, risks and opportunities in the acquisition of investment properties on Curacao

The term due diligence in dutch, literally means “due diligence” in English. In sales processes and acquisitions, especially when you also include the entity in which the property is housed, this stands for due diligence. Accuracy is particularly important in this type of transaction. The stakes are often high. In addition, every sale or acquisition is different. The process is almost always time consuming and complex. This requires a flexible consultant with thorough knowledge and experience.

Buyer Support: Due Diligence / Due Diligence

In a takeover process, a lot of information is exchanged between the seller and buyer. The seller likes to show his offer and himself from his best side and his advisor mainly emphasizes the positive sides. The buyer usually makes an offer based on the information gathered. In a next step in the acquisition process, the buyer will have the opportunity to validate that image and to discover any risks associated with the transaction. You can have a due diligence carried out for this. In this investigation, you will find out whether the figures provided are correct, such as expiry dates of rental agreements, payment behavior of current tenants, current and expected costs.

We support you on the research

Our research sometimes reveals unpleasant surprises. Such a surprise can have a serious impact on the chance of success. We know what to look out for, we look at the rental flows and analyze the cost items, and when it concerns an entity, we also look at the returns and annual accounts. In summary: due diligence is essential in the real estate purchase process in Curaçao, as it allows you to conduct a thorough investigation of the property before finalizing the purchase. The purpose of due diligence is to identify any potential risks, legal issues, or hidden flaws so that you can make informed decisions. Here are five key points to keep in mind during the due diligence process if you are carrying out due diligence yourself: 1. Title research: Check the title documents and have a thorough title research done to confirm that the seller has the right to sell the property and that there are no title disputes. This also includes checking for any restrictions or encumbrances that may affect the property.

2. Structural Inspection: Have an independent surveyor thoroughly inspect the property for architectural aspects and structural integrity. Look for any defects, shortcomings or damage that may require repair or maintenance.

3. Environmental aspects: Check if there are any environmental issues that could affect the property, such as soil contamination, waste disposal or other environmental issues. This may affect the value and future operation of the property.

4. Legal and Financial Obligations: Investigate whether there are any outstanding legal disputes, lawsuits, tax bills or other financial obligations that may affect the property. Make sure you are aware of any current or potential obligations.

5. Zoning and Regulations: Check that the property complies with the area and other local regulations. This includes examining any restrictions on the use of the property, such as building height, building density, etc. By paying attention to these five key aspects during the due diligence process, you can be better informed about the property you want to buy and minimize any potential risks before making a final decision. It may also be wise to seek professional advice from a lawyer, a real estate agent or other experts to ensure that your interests are protected during the buying process.

Need more information about the due diligence process? Please contact me at adriaan@sunlife.realty +599 9 686 2994.

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