What To Keep In Mind On Environmental Due Diligence?
When it comes to environmental due diligence, there are actually a number of steps involved in it. Let’s assume that things are done right, the risks associated with land development can be significantly reduced and the odds for making profit are 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. 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 buying a land is risky and it is advisable to try minimizing all potential risks from the start. 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 put it simply, does the property’s title come clean? 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 – you need to check if there are encroachments from the adjoining land on your properties or vice versa when it comes to environmental due diligence. Encroachments are anything from 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.