The first standardised Scottish property document produced by the PSG was the Due Diligence Questionnaire (DDQ). First published in 2003, this is now in its 27th edition. It is accompanied by updated Guidance Notes.
While it was intended to fill the gap in procedure that the CPSEs covered in England, we made a conscious decision at the time not to require the information to be warranted, as the experience with replies to CPSEs was that that tended to elicit “satisfy yourselves” responses rendering much of the response unhelpful. As the Guidance Notes indicate, it is always open to the parties to include references to specific items within the Sale/Purchase contract if they wish.
The DDQ is instead specifically designed to streamline the sale of commercial properties by providing a structured format for information gathering during the due diligence process and facilitating the identification at the outset of the information customarily required by a purchaser to carry out its due diligence exercise quickly and efficiently. The DDQ is not, however, a substitute for normal conveyancing procedures nor is it intended to form part of the sale/purchase contract except to the extent expressly agreed and incorporated into the sale contract.
The DDQ will not be appropriate for every transaction. This will depend on the type of transaction and the information already provided by the seller. The purchaser’s solicitors should tailor the DDQ appropriately if asking for it to be completed after information has been provided by the seller (for example on a datasite) to avoid duplicating requests for information. Even if the use of the full DDQ is not appropriate it is a useful checklist to assist in the due diligence process.
We recommend that to maximise the efficiency of the DDQ, users should incorporate relevant information directly into the document. This approach mirrors the methodology used in the PSG suite of documents, ensuring a concise and comprehensive record. The main body of the DDQ covers a wide range of enquiries, including property titles and compliance with planning permissions, among others. Annexed to the DDQ are separate sections in relation to non-standard areas such as occupational leases, employees and VAT treatment which can be sent separately to the relevant advisors to respond to.
While the DDQ is designed to be straightforward, specific transactions may require additional enquiries and it is for users to ensure that they cover everything they need….
Accessing Guidance and Resources
The DDQ and its accompanying Guidance Notes are available on the PSG website. We encourage users to review these resources to ensure a thorough and efficient due diligence process.
As always, we welcome feedback from users to improve our documents and resources. Our contact details can be found on the PSG homepage.