All real estate buyers should carry out due diligence, especially in the purchase of vacant land. Invert the right amount of time and money before closing a deal reduces the risk of discovering costly problems later. Prospective buyers should make a checklist of information of due diligence to request the seller and obtain third party consultants. The specific contents of the checklist of due diligence vary with each transaction and the buyer; however, there are inherent key elements to be included in most cases.
A prospective buyer of vacant land should investigate whether existing town development plans allows the buyer. The need for a change of planning does not necessarily eliminate a deal, but can substantially affect the value of a property to the buyer. Search in urban settings may take more than a year and sometimes cost six figures legal fees and other expenses. The investment of time, effort and money can also be a problem.
The property owners can incur large costs for the presence of hazardous substances that they did not deposit. The recovery of areas that are suitable for the proposed use can also be very expensive. Hiring a consultant Environmental qualified to conduct an evaluation environment (also known as Phase I report) can help uncover environmental problems. The usefulness of Phase I depend on the scope of the consultant environmental of the work. Wrong by following ASTM updated and all applicable standard queries could cause costs that can be avoided with due diligence properly.
The studies provide a visual representation of a property. The information included in a study varies greatly depending on the scope of the labor inspector. At the most basic level, recognition could show only the boundary lines of the property. Most buyers (and their lenders) want more detailed studies on the location of easements and utilities information, existing improvements, invasions and other features that may impact the use and value of the property. The American Land Title Association (ALTA) and the American Congress on Surveying and Mapping (ACSM) have adopted standards reconnaissance surveys. A surveyor who issues a HIGH or ACSM certification confirms the appraiser followed the requirements and minimum standards adopted by ALTA or ACSM, as well as work items optional scope of Table A of the standard contained in the certified surveyor.
Register of deeds
The registers of deeds give buyers information on liens, easements, as well as “covenants, conditions and restrictions” (CC & R, for its acronym in English) and other issues reported in the public records affecting a property.
Most leases are not recorded. The buyer must obtain copies of all existing leases by the seller and review to determine the remaining life of the lease, the amount of rent and any option or right of preference granted to the lessee. Conduct a physical inspection of the property helps a buyer determine if a tenant currently has possession.
There is no substitute for a physical inspection of land. Inspectors must be exercised to prepare a study, but this will only show the specific elements considered in the scope of the study. Insurance companies of title limit their views on issues that could lead to an insurance claim of title. A buyer make a physical inspection on the property might discover harmful conditions that would not appear in a study of ALTA or as an exception in a report title.