A buyer finds a profitable Jacksonville business, agrees on a price, shakes hands, and signs an asset purchase agreement built from a template. Months later the Department of Revenue sends a bill for the prior owner's unpaid sales tax, an equipment lender files to repossess the espresso machines, and the landlord refuses to recognize the new tenant. None of that was in the price. All of it was findable before closing.
Buy-side due diligence is the work that turns a handshake into a deal you can live with. After 30 years of reviewing transactions, these are the five diligence failures that cost Florida buyers the most money, and what closing each one looks like.
1. Assuming You Do Not Inherit the Seller's Tax Problems
This is the one that surprises buyers most. Under Fla. Stat. s. 213.758, a buyer of more than 50% of a business, its assets, or its stock of goods is jointly and severally liable for the seller's unpaid, Department-of-Revenue-administered taxes, chiefly sales and use tax and reemployment tax. The liability is capped at the greater of fair market value or total purchase price, and assumed non-insider liabilities do not reduce that measure, so you size an escrow off the cap, not off the cash changing hands.
The clean exit is a Certificate of Compliance, requested through the DOR Tax Clearance application. It takes the state 7 to 10 business days, the seller (not the buyer) must request it, and a "Tax Clearance Letter" is not the same thing and will not protect you. Where there is no time or no clean certificate, the alternative is an escrow holdback against the exposure, with the statutory mechanic that the buyer may withhold and must remit to the state within 30 days of transfer.
2. Skipping the Lien Search That Replaced Bulk Sales
Florida has no bulk sales law; it was repealed. There is no creditor notice to send. What protects a buyer instead is a lien search, and skipping it is how buyers end up owning assets that still belong to someone else's lender. Under Florida's secured-transactions rules, a secured party's interest follows the assets into the buyer's hands, and the filing stays effective even if the lender knew of and consented to the sale.
Run a certified UCC search against the seller's exact registered legal name, every prior name, and any predecessor entity, then read the collateral descriptions to see which filings actually touch what you are buying. Add the state judgment-lien registry, county records, and a federal tax-lien search. Then insist on UCC-3 terminations and payoff letters delivered at or before closing. A promise to clear a lien after closing is close to worthless. And bring every search down to the day of closing, because a search run at the start of a 30-day inspection period is already stale.
3. Treating the Lease as Boilerplate
In a storefront, restaurant, or venue deal, the premises lease is usually the single most important asset you are buying, and it almost never transfers on its own. Most commercial leases carry an anti-assignment or change-of-control clause requiring the landlord's written consent, and the landlord will often use that leverage to demand a new guaranty or revised terms.
Read the assignment clause and the consent standard, the remaining term and renewal options, any personal guaranty, the CAM reconciliation, and whether the use clause even permits what you intend to do at the space. Then obtain a landlord estoppel certificate and written consent to assignment before closing, not after. If the lease controls the location and the location is the business, a deal can collapse on this one clause. For the operating-expense side of that lease, our companion article on the six operating-expense clauses that decide what a Florida commercial tenant really pays walks through the numbers, and our Lease Review service reads the lease clause by clause.
4. Assuming the Licenses and Permits Come With It
Every license, permit, and registration needs its own answer to one question: does it transfer, does it get reissued, or does the buyer have to apply fresh? The answers vary by license, and a deal can collapse if a key one cannot move. Some do not transfer at all: in Florida, alcohol licenses require a new application, and the seller's sales-tax certificate is not assignable, so the buyer must obtain its own registration before opening. Willful failure to register after notice is a felony, which is a strong reason not to improvise here.
Confirm the certificate of occupancy and the approved occupancy classification, the local business tax receipt for the City of Jacksonville and Duval County, zoning confirmation that the use is permitted at the premises, and the most recent fire inspection with any open violations. For assembly and special-amusement uses, fire and life-safety requirements can apply regardless of occupant load, so do not assume the current layout is compliant for your plans.
5. Buying the Claims That Follow the Business
Some liabilities do not care that you bought assets instead of stock. Wage-and-hour, discrimination, and retaliation claims can follow the business under the federal substantial-continuity doctrine, and an asset purchase can satisfy the privity threshold the Eleventh Circuit applies. Your purchase agreement can allocate that loss between buyer and seller; it cannot stop a claimant from naming the buyer. The same is true of pending or threatened litigation, customer-injury claims, and consumer complaints.
The diligence answer is a real schedule of pending, threatened, and settled claims, five years of insurance loss runs, and a holdback sized against anything identified. Watch the employment paper too: in Florida, employee non-competes and personal-service contracts generally do not pass in an asset sale without an assignment clause or consent, so if the people and their covenants matter, get fresh ones signed at closing.
What the Diligence Actually Buys
For a buyer acquiring a business under roughly $2 million, the legal side of due diligence is not a formality. It is the LOI and purchase agreement, the lien and litigation searches, the lease assignment and landlord consent, the license and permit transfer, the tax-clearance coordination, and the escrow and holdback drafting that turns every risk above into a number you negotiate instead of a surprise you inherit. The cost of that work is a fraction of any one of these failures, and the entire point is to find the problems while you can still price them, walk, or make the seller fix them.
Not every deal needs every step at full depth. A single-location, cash-basis business with clean books and no real estate is genuinely simpler than a multi-site operation with inventory and financing. But the five failures above show up across the whole range, and each one is cheaper to close before signing than to litigate after.