Why Due Diligence is Needed for Property Development
Never buy vacant or developed land for the purpose of property development unless you have performed due diligence to establish whether the property can indeed be used for the purpose intended. The due diligence process performed by town planners in conjunction with other professionals such as real estate agents, land valuers, lawyers, and surveyors can help you save unnecessary expenses.
The due diligence property development checklist is comprehensive and though you may perform many of the assessments without professional help it can be a time-consuming process. Omitting detail can mean the difference in making a profit or losing your money because of the wrong investment.
The general factors to assess include the property description, whether there is a land claim on the property, current ownership and compliance with municipal regulations. It also includes determining the borders of the property, reviewing whether municipal rates and taxes are up to date, establishing the exact size of the parcel of land and, if available, reviewing the initial environmental impact study.
Professional town planners can help you obtain relevant maps such as zoning, street and flood plain maps in addition to road network plans, plans for development of the surrounding area, the master plans and soil maps. They will also conduct the boundary survey and assess which community amenities are nearby and whether there are any wetlands or conservation areas surrounding the parcel of land. You will furthermore benefit from getting a topographic survey, soil analysis, information about the municipal levies and aerial photos or video of the property and surrounds.
The zoning of the property will determine whether you can directly develop it for your specific intended purpose or whether you will need to apply for rezoning. The town planners will also assess which zoning restrictions apply, what the building density and population density specifications for the area and property are and whether there are buffer requirements, spaces which may not be developed and whether any constraints are applicable to the property development on the parcel of land.
In addition to land use rights, the town planners, as part of the due diligence process, will assess whether there are any rezoning applications in the area, what regulations exist for road access, land development, stormwater drainage, impact on infrastructure regulations, and road improvements.
Since the property is not an island, it means that what is done on it will affect surrounding properties and it will be affected by the adjacent property uses. As such, the due diligence process also entails assessing the existing properties in the neighbourhood and any planned developments, as well as reviewing how these will affect the specific property development you have in mind. It is also imperative to assess whether there is a risk of the people in the community objecting to your proposed property development.
The town planners then assess the specific features of the proposed property where development is to take place. This assessment includes reviewing of the flood plains, current and potential environmental limitations, ponds that will affect the development, any types of space, nature or conservation buffers that are in place and the drainage patterns, boreholes, water availability and water pressure. They will look at current overhead power lines and possible building restrictions because of these, and what the capacity of the land is for the intended development purpose.
Factors that must be considered include the slope and topography of the land, the water table and the soil type, as it will affect the building costs, as well as the general layout of the property and surrounding road conditions. If there are buildings on the property, which you want to demolish, then the town planners will also obtain information regarding demolition requirements. Aspects not to overlook include the location of the sewer line, possible soil erosion, right of way, connection to adjacent properties and the current vegetation on the piece of land. They will contact various government and municipal departments to obtain the necessary information in addition to working with professionals in surveying, analysing and mapping the property.
The Practice Group is a well-established urban and regional town planning firm with a mapping division. Apart from conducting the due diligence property development process, we assess the development potential with recommendations for the best usage of the property.