WHAT IS THE LAND DUE DILIGENCE PROCESS?
Anyone planning to develop a commercial property will immediately realize that commercial projects involve navigating a complicated maze of regulations. Before purchasing land or beginning construction on a commercial project there are numerous significant details and issues that need to be thought through and prepared.
This preparation process is referred to as the Land Due Diligence process will help determine the potential of a property and will save money from costly construction costs and changes that would have to be made to correct issues. At Maxx Builders and Designers, our expert team of builders and engineers strive to make this process efficient and simple for our clients, from beginning to end. Our consulting services maximize the efficiency of the building process by solving any permit or design problems.
Conducting proper due diligence evaluations Some of the steps for due diligence include:
-Determining the usable square footage of the property to establish how much land the city may require for street widening, utilities, or expansion. This also accounts for how much of the property is unusable due to grade or water issues, land required for easements, configuration of land, and landscaping and green area requirements.
-Obtaining proper zoning and planning designation for the use your property requires. it’s important to get your property rezoned or make the required changes to the planning designation. This is a difficult process that requires expertise from a consultant who is knowledgeable about zoning requirements.
-Determining off-site development costs include the costs incurred by a landowner who is building on their own property, but is required to solve certain municipal matters before obtaining a building permit or certificate of occupancy. Off-site development costs can be very expensive. Usually the local municipality will declare that a street running adjacent to a property will need to be widened and the property owner will need to pay a portion of these costs. Another issue may be utilities that are located far from the property. In this case, the property owner is responsible for paying these costs too.
-Conducting soil testing, which is required to determine the type of structural foundation required for the given soil’s weight bearing capacity. This information is gathered by a structural or architectural engineer who can then establish the building costs.
-Obtaining a title commitment from a title insurance company providing any exceptions to the title that would limit the use of the property. Title issues can be one of the most frustrating parts of land development if handled improperly.
-Conducting environmental testing, which requires a special certification and compliance. When it comes to environmental testing, the first stage is usually a Phase 1 Environmental audit. If the property is tested with only minor issues, one phase of testing is adequate. Otherwise, a Phase 2 audit is required to govern what would be required to make the property in compliance with environmental laws.
-Evaluating the impact on the property valuation is typically a subjective matter. The ways that a building project could be valued may vary widely. Consulting with a real estate appraiser or broker can help property owners save equity dollars when negotiating the term of their loan.
Our team at Maxx Builders and Designers understands that this is a complex process; and we’re happy to offer our consulting services for land due diligence to help solve permitting and design problems with your next commercial project. Our Maxx consultants have the expertise and knowledge to proficiently structure your building process, assure a cost efficient design, and accurately navigate the maze of regulation.
Don’t do it alone, contact us today to schedule a courtesy consultation.