What To Keep In Mind On Environmental Due Diligence?
In reality, there are several steps involved when it comes to environmental due diligence. Let us say for example that everything is done correctly, the risks associated with land development are significantly reduced while the possibilities for making profits are 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. 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 buying a land is risky and it is advisable to try minimizing 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. Just what we have learnt earlier, there are many factors that go with the whole process of environmental due diligence which influences the decision of buying 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’ve 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. There are issues that can be resolved while others can be solved in a timely manner and in case that you have decided to still pursue with the purchase if there’s unresolved issues in the land, it’s all in your discretion.
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.