Your land acquisition due diligence checklist: A must-have for municipal leaders and developers

Key aspects of land acquisition due diligence 

Aspect

Description

Environmental requirements

• Environmental assessments identify and quantify environmental risks of the land to project remediation/cleanup costs.

• Common environmental appraisals for land acquisition due diligence include Phase I and Phase II Environmental Site Assessments (ESAs), environmental questionnaires, Record Search and Risk Assessment (RSRA) and transaction screens.

• For land remediation projects, soil and groundwater investigations and underground storage tank (UST) site assessments are imperative to project site cleanup costs.  

• Additional measures, such as feasibility studies and critical issue analysis, may be required to satisfy environmental due diligence. 

Legal and administrative considerations

• Certain legal and administrative considerations, such as examining a property’s historical usage records, are covered under a Phase I ESA. 

• Property surveys, easements, title reports, previous title policies, appraisals and historical bills should be studied to understand the legal and administrative aspects of a site.  

• Assessment of liens/litigations, due diligence on mergers and acquisitions, analyzing land records, investigating a site’s zoning, site surveys, aerial mapping and wetland mapping should be considered. 

Developmental feasibility

• Developmental feasibility assesses the critical factors to determine the likelihood of a land development project’s success.

• Factors such as necessary site work, topography, buildable area, access to utilities, Traffic Impact Studies and economic drivers should be considered to evaluate the feasibility of the redevelopment plan and proposed layout.  

Municipal considerations

• Local municipal regulations govern what can and can not be done on a property. Municipal considerations also help evaluate the projected future property valuation.

• Some critical factors for municipal due diligence include land use, off-site improvements, zoning, open space requirements, impervious surface allowances, etc.    

Funding/financial considerations

• Financial considerations assess a land development project’s financial viability and the means to fund the cleanup costs, if any. 

• Factors such as residual land value, carrying costs, entitlement costs, estimated soft/hard costs and comparable pre- and post-development land sales should be considered.