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 before you decide to sign a contract with the seller is negotiating clearly all terms you need in environmental due diligence. Say that you as well as the seller understand all that’s expected of both sides, especially in due diligence period, you can avoid problems in the future. Basically, this is when you should consider calling a lawyer to be sure that the transaction goes smoothly and no problem will arise.
We all know that buying a land is quite a risky decision and it is ideal to try to minimize all potential risks from the start. 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’s mentioned earlier, there are several factors that go with the process of environmental due diligence which influences the decision of buying an unimproved land and these include the following.
Number 1. Title issues – are there anything suspicious on the land title or in other words, does the seller has a clean title to the property? As the buyer, it’s your responsibility to review all the 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. On the other hand, you at the same time has to review the documentation yourself as well.
Number 2. Survey Issues – when it comes to environmental due diligence, you have to check if there are encroachments from adjoining land on your properties or vice versa. Basically, encroachments are anything about 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 – another thing that should not be forgotten in environmental due diligence are 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.