Due Diligence Guidelines: Introduction
About Real Estate Due Diligence
These Due Diligence Guidelines are provided to assist the University System of Georgia (USG) institutions regarding Board of Regents procedures for real estate transactions.
Following these guidelines will facilitate the timely review and comprehensive understanding of real estate transactions that is expected by the Board of Regents and necessitated by our roles as public servants. To that end, the following general comments are made:
Consult with the System Office early in the process.
Consulting with the System Office early in the process is helpful for real estate transactions requiring Board approval and routine real estate transactions, and is essential for non-routine real estate transactions (real estate transactions for which there have been no Due Diligence guidelines established).
Submit Proposals through Integrated Review prior to completing due diligence. Most real estate transactions require a project concept proposal to be submitted for integrated review. Due diligence should not be completed or submitted until the proposal has cleared review.
Submit complete information.
The same detailed review is necessary for those real estate transactions that are within the authority delegated to the Chancellor as for those items that require specific Board approval. The intent of the Due Diligence guidelines is to assist the institutions in submitting information that is as complete as possible. Responses should be fully explanatory and not perfunctory.
Plan for adequate review time in advance, and for completion of transaction post-approval. Once a complete due diligence package is received, it may take up to 4 weeks for Real Estate & Facilities to thoroughly review all submitted information before the proposed transaction can be placed on a Board agenda or approved within the Vice Chancellor for Facilities’ delegated authority. Similarly, once a transaction is approved, please allow adequate time for the necessary legal assistance to be procured through the Attorney General’s Office and all legal documents researched and prepared. As a rule of thumb, most acquisitions require at least 90 days from time of approval to closing.
Annotate standard agreements, when used, to clearly indicate changes made.
All agreements are reviewed for legal and business adequacy. If the institution negotiated terms differing from those contained in the standard agreement then it is helpful to state this and to provide a redline document highlighting any differences. Additionally, if there are no modifications to the standard agreement, then stating this will also expedite the review.
Do not communicate directly with the Attorney General’s Office.
The Attorney General’s office is tasked with providing legal advice only, not advice on business term issues. When the System Office is circumvented the Attorney General’s Office frequently provides advice on business terms. This advice may be in conflict with Board policy, approval or intent. Not all real estate transactions require specific review by the Attorney General’s Office. The System Office can help facilitate review by the Attorney General’s Office of specific items requiring review. If there is the necessity for direct communication between the institution and the Attorney General’s office, this will be coordinated by the System Office on a case by case basis.
Establish a single point of contact for each real estate transaction for the institution.
All responses to follow-up questions should be focused through a single point of contact for each real estate transaction. Multiple contacts provide conflicting and inconsistent information or information that does not adequately address the issue being raised.