All About Environmental Due Diligence You Must Know
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 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’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 – 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. Hiring a real estate lawyer to review all the documents on your behalf is strongly recommended regardless if you’re an amateur or a seasoned developer/investor. You on the other hand have got to review the documentation yourself too.
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. Encroachments are anything from 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.