What To Keep In Mind On Environmental Due Diligence?
As a matter of fact, there are a lot of steps involved in doing 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. 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 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 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. You on the other hand have 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. 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. 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.