Commercial property managers need to be more diligent than ever when securing new tenants for commercial, industrial, and retail property in this post-lockdown era.

There is a growing number of insolvencies as companies start to move off the benefits of virus-related subsidies, such as JobKeeper, that the Government created to secure the economy during the pandemic.

Unfortunately, this has created a potentially perilous landscape for agents and property managers. To conduct best practice due diligence, you must now delve deeper than ever into the commercial records of companies seeking new leases or extensions to current arrangements.

Failure to meet these obligations exposes you to compensation claims from a client and potentially disciplinary action that can result in restrictions on your license, suspension, or a loss of your license - the stakes are extremely high right now.

We know you take these responsibilities incredibly seriously and we have integrated the ability to conduct more detailed searches and reports with Australia's largest credit checking provider, Equifax.

Below are seven tips to help you execute a best-in-class due diligence...

1. Be aware that an ASIC search and obtaining director guarantees may no longer be regarded as sufficient due diligence when working to protect your landlords or clients. Standard checks do not reveal signs that companies may be ‘zombies’ or ‘phoenixes’.
2. Ask prospective tenants for financial information, such as a balance sheet and cash flow projection. Ensure these have been signed off by an accountant.
3. Seek a corporate structure diagram to get a “picture of substance” of a prospective tenant.
4. Always verify facts and materials that are presented.
5. Watch for tenants who suffer drops in turnover, reduced employee numbers, or cease trading on the premises.
6. On the REI Forms Live system, use the new Equifax integration to request in-depth reports that focus on a company’s payment record, trading history and directors’ performance.
7. In addition, check credit risk scores for an enterprise and its directors from Equifax.