Due Diligence

Understand due diligence in Canadian real estate — what it involves, why it’s critical, and how it minimizes risk.

Due Diligence

August 08, 2025


What is Due Diligence?

Due diligence is the comprehensive process of investigating a property or investment to confirm all material facts before completing a transaction.

Why Due Diligence Matters in Real Estate

In Canadian real estate, due diligence helps buyers, investors, and lenders assess risks and make informed decisions.



Key components:
  • Reviewing financial, legal, and physical property records
  • Conducting building inspections and environmental assessments
  • Verifying zoning, permits, and title history



Understanding due diligence helps prevent surprises after closing.

Example of Due Diligence in Action

The investor conducted extensive due diligence, uncovering zoning restrictions that impacted redevelopment plans.

Key Takeaways

  • In-depth investigation before completing a transaction
  • Covers financial, legal, and physical aspects
  • Helps identify risks and hidden issues
  • May involve multiple professionals and inspections
  • Essential for investors and lenders

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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