Due diligence

Davie Kaplan Chapman & Braverman, P.C. has developed due diligence procedures specifically designed to address the problems often associated with equity financed residential and commercial developments. Regardless of the extensive efforts put forth by a financial partner and developer in drafting a definitive operating agreement, there are almost always disagreements as to what costs are considered to be allowable project costs.

The procedures offered by Davie Kaplan Chapman & Braverman, P.C. focus on the project costs that are often the most ambiguous. Our procedures can be modified to accommodate specific project concerns, however, they generally include the following:

• Verification that all developer allocated costs such as insurance and payroll, have been allocated consistent with the operating agreement
• Determination that costs are properly categorized
• Review of project trial balance for unusual balances or transactions
• Recalculation preferred returns
• Review of Estimate To Complete
• Review of all related party transactions

At the conclusion of our Agreed-Upon Procedure engagement, we provide a report which includes a description of our procedures and related findings, a budget to actual analysis, a summary of adjustments as a result of the procedures, and a final accounting of the project which includes how the final proceeds are to be distributed.

For more information, contact David C. Pitcher