Environmental Due Diligence
In reality, there are several steps involved when it comes to environmental due diligence. Assuming that everything’s done right, the associated risks with land development are reduced greatly and the odds for making profit are substantially increased.
The first step prior to signing a contract with the seller is to negotiate clearly all the terms you require in environmental due diligence. In the event that you and the seller has understood all of the expectations of both sides particularly with regards to due diligence, you’ll be able to avoid problems to happen. This is basically when a lawyer will come into the scene to ensure that the transaction goes smoothly and no problem will arise.
We know that trying to buy a land is very risky decision and it is preferable if you are going to minimize the potential risks from the very beginning. Most of the time, land purchase contracts are going through numerous revisions and negotiations and it’s more difficult when the contract has been signed to get both parties agree on contract amendments. Like what mentioned earlier, there are a number of different factors that go with the entire process of environmental due diligence which can influence the decision of buying an unimproved land and these are as follows.
Number 1. Title issues – does it seem that something is suspicious on the land title or in other words, are you sure that the title to the property is clean? It is your job as the buyer to review all reports and the underlying documents that may affect the property. It is advisable if you are going to hire a real estate lawyer who will review all documents on your part no matter if you’re amateur or a seasoned developer/investor. You on the other hand have got to review the documentation yourself too.
Number 2. Survey Issues – when talking about environmental due diligence, checking encroachments from adjoining land on your properties or vice versa is a must. Encroachments can be utilities, neighboring buildings, water, fences and the likes. Say that there are presence of such, you and the seller must come to a resolution prior to closing the deal. Some issues might not be resolved or can be resolved in a timely manner and you have to decide if you still like to continue with the purchase even if there’s unresolved issue in the land.
Number 3. Land use approvals – also, you must not forget about the zoning regulations, building permits and approvals, site plan approvals, setback issues, lot size, fire safety issues, health issues like septic disposal, sewer, storm water management, rivers, wetlands, streams and so forth in environmental due diligence.