Seller Due Diligence in Commercial Property Sales: Premise Liability, Zoning Permits, Construction Liens

A live 90-minute premium CLE video webinar with interactive Q&A

Thursday, March 17, 2022

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

(Alert: Event date has changed from 11/29/2021!)

or call 1-800-926-7926

This CLE webinar will answer concerns that real estate counsel must consider when representing sellers in real estate transactions. The panel will address the issues that sellers often overlook, which may position sellers to minimize liabilities and have greater flexibility to move on from deals with minimal costs if a sale fails to close. The panel will delve into premise liability and third-party contractors that assess the property, zoning and permitting issues, and how to handle construction liens.


There are risks inherent in purchasing property, and buyers are not expected to purchase blindly. Even the least sophisticated purchaser will engage in some degree of due diligence to learn about the asset they seek to acquire. The challenges and issues that face sellers during the due diligence process are addressed less often.

Most landowners understand that they may be liable for injuries to others that occur on their property. That same principle of premises liability applies to a potential buyer and its agents who may need to access a seller's property to perform due diligence inspections. Often, these agents will be third-party contractors (e.g., environmental inspectors, engineers, or architects) engaged by a buyer. If these parties are injured on-site, the seller may incur costs and liability exposure.

Sometimes the seller will pursue zoning or permits, commonly called entitlements, to make the property more marketable or increase its value. The purchase agreement should provide a pre-closing period for the buyer to seek whatever entitlements it needs, often allowing the buyer to terminate the contract before closing if those approvals are withheld. While the property is off the market, there is no guarantee that the transaction will close without the flexibility to sell the property for a higher price if the market changes. If the potential buyer obtains the entitlements, the property may be unfit for other uses.

Most due diligence is limited to investigations of the property in its current condition or feasibility analysis to determine whether a proposed use is compatible with the property. Less commonly, buyers may seek to improve the property before closing or engage third parties to plan future improvements. Those situations may entitle third-party contractors to "construction liens" if they are not fully paid for their work. This creates a risk to a seller because construction liens attach to the for sale property, even though the seller never contracted with the lien claimant and has no duty to pay them.

Listen as our authoritative panel addresses the need for sellers to complete due diligence before selling a property. The panel will discuss how to navigate those issues to avoid these potential pitfalls and ensure that a transaction goes from signature to closing without unexpected problems.



  1. Due diligence from seller perspective
    1. Premises liability
      1. Third-party contractors
    2. Entitlements
      1. Zoning
      2. Permitting
        1. Restricted use
    3. Construction liens


The panel will review these and other important topics:

  • What considerations should a seller have when entering a real estate transaction?
  • How can liability insurance mitigate the risk of third-party contractors damaging the property?
  • What risks are associated with permitting or zoning property before closing a transaction?
  • How can sellers protect property from construction liens while selling the property?


Tomlin, John
John Tomlin

Founder and Principal
Tomlin Law NYC

Mr. Tomlin's practice focuses on commercial real estate, corporate structuring, and business transactions. His...  |  Read More

Additional faculty
to be announced.
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