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. You can avoid problems to arise in the future say that you and the seller as well has understood all that is expected of both sides, particularly in due diligence period. Basically, this is when you should consider calling a lawyer to be sure 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. Normally, land purchase contracts go through various revisions and negotiations and it’s more difficult when the contract has been signed in getting both parties agree on the 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 – are there anything suspicious on the land title or in other words, does the seller has a clean title to the property? It is your job as the buyer to review all reports and the underlying documents that may affect the property. It is strongly recommended regardless if you’re an amateur or a seasoned developer/investor to hire a real estate lawyer to review all documents on your behalf. 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. You and the seller as well need to resolve these issues before closing on the deal if there are any of it. 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.