A retail strip along the Highway 99 corridor, a shop building on the edge of town, a small office near downtown: commercial property in Delano comes in many forms, but every purchase shares one risk. Once your due diligence period ends, most of what you did not discover becomes your problem. Commercial property due diligence is the structured review a buyer does between signing the purchase agreement and removing contingencies, and it usually reaches well beyond a home-style inspection.
This checklist walks through the review in the order most buyers can work it. Your attorney, lender, inspectors and tax advisor each own parts of it; the point here is to make sure nothing falls between them.
Step 1: Set the Due Diligence Window Before You Sign
The due diligence period is negotiated in the purchase agreement, not set by law, so the first step is getting enough time. Commercial contracts commonly spell out how many days the buyer has to review the property, what the seller must deliver and by when, and how the buyer cancels if the review turns up a problem.
Build the window around the slowest item. An environmental report, a survey and lender appraisal can each take several weeks, and in Kern County’s agricultural economy, buildings tied to packing, cold storage or equipment yards may need more specialized inspections than a plain office. Ask for the delivery clock on seller documents to start at signing, and make sure the contract states what happens if documents arrive late.
Step 2: Read Every Lease and the Rent Roll
If the property has tenants, the leases are the asset you are buying. A rent roll is a summary; the leases themselves control. Review each one for rent, term, renewal options, rent increases, who pays taxes, insurance and maintenance, and any rights that could limit you, such as a right of first refusal or an exclusive-use clause.
Tenant estoppel certificates are the standard way to test the rent roll. Each tenant confirms in writing its rent, deposit, lease term and whether it believes the landlord is in default. A tenant who refuses to sign, or whose estoppel does not match the lease, is a flag to resolve before closing.
Check the operating history too. Ask for at least two to three years of income and expense statements, utility bills and property tax bills, then compare them with what the leases say tenants reimburse. Gaps between the two are where cash flow surprises usually come from.
Step 3: Order a Phase I Environmental Site Assessment
A Phase I environmental site assessment reviews a property’s past and present uses for signs of contamination. It matters because federal cleanup law can hold an owner responsible based on ownership alone. According to the EPA’s All Appropriate Inquiries guidance, buyers who want to claim protections such as bona fide prospective purchaser status must conduct all appropriate inquiries before acquiring the property, and the ASTM E1527-21 Phase I standard can be used to meet that requirement.
Timing is part of the rule. The EPA says the inquiry must be conducted or updated within one year before acquisition, and certain parts, including interviews, records review, the site visit and the lien search, within 180 days. An old report the seller hands you may not count.
Around Delano, history is the key question. A building that once housed fuel storage, a repair shop, agricultural chemical handling or dry cleaning deserves extra attention. If the Phase I recommends further testing, a Phase II with soil or groundwater sampling may follow, which is another reason to protect your timeline in Step 1.
Step 4: Confirm Zoning and Permitted Use
Zoning determines whether your planned use is allowed at all. The City of Delano regulates land use through its zoning ordinance and official zoning map, and properties outside city limits fall under Kern County rules instead. Confirm the parcel’s zoning directly with the city or county planning department rather than relying on a listing description.
Ask specific questions. Is your intended use permitted outright, allowed only with a conditional use permit, or not allowed? Are there parking requirements your use would trigger? Is the current use legally nonconforming, and would a change of tenant or a remodel end that status? Also request permit history from the building department, since unpermitted additions or tenant improvements can create costs after closing.
Step 5: Inspect the Building Systems
A commercial property inspection looks at the components that drive repair and replacement costs. Hire inspectors with commercial experience and, for larger buildings, consider specialists for the roof, mechanical systems and structure.
| Area | What to look for | Why it matters |
|---|---|---|
| Roof | Age, ponding, patches, drainage | Flat commercial roofs are costly to replace |
| HVAC | Unit ages, service records, capacity | Central Valley summers put heavy load on cooling systems |
| Electrical | Panel capacity, condition, service size | A new tenant’s equipment may need more power |
| Plumbing and sewer | Leaks, line condition, grease interceptors for food uses | Sewer repairs can be disruptive and expensive |
| Structure and paving | Cracks, settlement, parking lot condition | Paving and drainage are recurring costs |
| Fire and life safety | Sprinklers, alarms, exits | Required for occupancy and insurance |
Compare the findings with the lease terms from Step 2. If tenants are responsible for HVAC under their leases, a worn-out unit is a different problem than if the landlord must replace it.
Step 6: Review Accessibility
Accessibility is a real cost item for older commercial buildings. The ADA Title III guidance says businesses open to the public must remove architectural barriers in existing buildings when it is readily achievable, meaning easy to do without much difficulty or expense, and that this applies regardless of the age of the building.
California has its own access specialists. The state’s Certified Access Specialist program lets owners and buyers find a CASp to inspect a property for compliance with state and federal accessibility standards. Ask whether the seller has a CASp report, and if not, consider whether one belongs in your review, particularly for retail or restaurant space.
Step 7: Clear Title, Survey and Insurance
Title review confirms what you are actually buying. Order a preliminary title report early and read the exceptions: easements, recorded covenants, liens and access agreements can all affect use. A survey shows whether buildings, fences and parking sit where the records say they do, and whether anything encroaches on a neighbor or an easement.
Get insurance quotes during the review, not after. Premiums for commercial property depend on construction type, use, fire protection and loss history, and an unexpected quote can change your operating numbers enough to revisit price.
Step 8: Line Up Financing and Your Own Numbers
Your lender runs its own due diligence, and its timeline has to fit inside yours. Commercial lenders typically order their own appraisal and may require a Phase I, a survey or a property condition report before they commit, so ask early which reports they will accept and whether they need to be addressed to the lender.
While those reports come in, rebuild the property’s income on your terms rather than the seller’s. Use the actual leases from Step 2, a realistic vacancy allowance, the repair items from Step 5 and the insurance quote from Step 7. Property tax deserves its own line: in California, the Board of Equalization explains that a change in ownership requires the assessor to reassess the property to current market value, so the seller’s current tax bill may understate what you will pay. Your tax advisor and the Kern County Assessor can tell you what to expect.
What Decides Whether You Proceed
The deciding moment is the contingency removal date, so work backward from it. Every finding should end in one of three outcomes before that date: accept it, negotiate a price change, credit or repair, or cancel within the contract’s terms. A finding you are still investigating when the deadline arrives is the most expensive kind, because removing contingencies usually means accepting it as is. In Delano, where many buildings have served several uses over the years, the environmental history and the zoning answer are the two items most likely to change the deal, so start those on day one.
When you want help organizing that review and negotiating the results, our commercial real estate services and investment property guidance cover the property side, and the team at Real Estate Agent Delano works alongside your attorney and inspectors.