Due diligence, or `due diligence 'checks (usually taken as a phrase translated from English) is a procedure for a thorough investigation of the company and business. This verification is carried out in order to ascertain: disclosures do not contain any inaccuracy, ambiguity, distortions or omissions. Carrying out such a procedure is desirable and in the implementation of major acquisitions. So, good practices for conducting due diligence when purchasing real estate and land plots.

`The purpose of the due diligence of the property is always the same - providing the client with full information about possible risks to acquire objects and the possibility of leveling the identified risks ', - comments Advisor` Magister & Partners' Elena Gerasimova.

The procedure for due diligence in real estate, usually conducted in several stages, during which examines the rights of the owner of real estate, history of the object, a string of acquisitions, the analysis procedure of privatization. Specialists also reveal the actual burden, with which the object is exposed for sale, conducting examination of the powers of the seller of the property, determine the competence and restrictions on the transaction.

Some companies interviewed RealEstate.ru, also said that providing escort services of the transaction of sale, preparation of documents for her, and offer customers the subsequent legal support in the implementation of property rights.

The range of fees for this service is quite wide and ranges from 1 thousand dollars for `clean 'area or object of up to 100 thousand dollars' cost of due diligence depends on the number of scanned objects. For example, during the procedure in the transaction M & A ( `M & A` - ca. Ed.) Number of objects can not exceed a dozen. Nevertheless, the legal audit reduces the risks to the site and provides the reliability of investment ', - concludes E. Gerasimov.

When the account goes to millions, the need to worry in advance, certain lawyers. Indeed, all sorts of conflicts with real estate assets in their practice, happened a lot. `As a rule, many customers do not attach much importance to various encumbrances, with which the object is sold, - says CEO Velez` Lex `Eugene Drozdov. - For example, such a fact as the existence of legitimate tenants can significantly hinder the realization of the rights of property '.

According to him, there are cases when the tenants signed long-term contract with the right of subsequent privatization of the object, then evict them without trial almost fail. In addition, said E. Drozdov, you need to take special care to objects, which in Soviet times had been made illegal additions. Thus, the then Civil Code 1964 provides that the term `illegal` only for homes and cottages. The concept of `illegal 'for the construction of buildings and structures erected by legal entities did not exist. Thus, in practice the extension of implementation without land acquisition and building permits are considered legal, especially if the building by public authorities, and writing about it has been included in the register of federal property.

In addition, the acquisition of land in scenic areas near Moscow experts recommend to carefully read the water protection and forest legislation of Russia and asked what part of the site can perform the construction.

`The failure of due diligence prior to investment in real estate, often at least lead to additional costs, as well as a maximum - the loss of rights to purchase the item, the investments '- draws the attention of the company's EV Gerasimova` Master and partners'. Some stories are continued in numerous judicial practice on a voluntary buildings, reclaim land, the defense of leases, the stated claims of restitution (vendikatsii).

However, according to EA Drozdova, invalid conclusion specialist, conducting due diligence, no. Perhaps for this reason that Russia still has the services firms, conducting due diligence, seek after the acquisition of the desired object. `This is just an expert opinion of the company, it does not take neither the courts nor the tax authorities. However, the facts and documents collected by the client companies can use when reasoning in the judiciary and the rule of law ', - he adds.

RealEstate.ru decided to find out whether such services used by leading players in the property market and land. The press service of the bank `Absolute` replied that the credit institution does not use these services. Development Manager of the companies `RosRazvitie` Elena Yudin said that the company employs its own specialists, as well as itself `conducts this procedure in a complex of services for the preparation of real estate transactions`. The company `Vash financial guardian` also independently conducts legal audits of acquired businesses and land. `Due diligence Russian companies we own, because it is usually the company, is a core for our group of companies, and we see no more competent and the best specialists able to undertake for us, Due diligence`, - dubbed the official position of company manager pr department Group of Companies Anna Shvidunova.

'Unfortunately, Russia's reporting form and Russia's customs of business make it difficult to assess any business according to Western standards, and therefore, even when working on similar tasks of leading western firms, their records, sometimes in more detail in small things, allow for significant errors in the main `-- she added.