THE DUE DILIGENCE PERIOD AND LAND
North Carolina real estate is subject to the Caveat Emptor principal - that is to let the buyer beware. The potential to buy a lemon is real with land.
Enter the Due Diligence period
The DD period allows the buyer a set time frame to investigate all of the unique factors of a parcel. The length of the DD period is determined within the Offer to Purchase and Contract (Form 12-T for Vacant Lots and Land) but typically is thirty or more days for land purchases.
This includes investigation into:
setbacks & encroachments
zoning & land use
topography & soil composition
wetlands, riverine restrictions & water rights
utilities & their availability
development feasibility
extant liens
subsurface rights
And so much more
During this period you and your agent will review all relevant documents, obtain legal advice if needed, inspect the property for defects, schedule inspections with utility providers, schedule consultations from relevant contractors and confirm any zoning changes that may be occurring.
By investigating all factors of land - factors that can significantly impact what you intend to do with that land, the buyer can prepare themselves for what is to come or decide to walk away from the purchase all together and save significant time and money.
So why is all of this important?
1. Is the property even suitable for what you want to use it for?
If you’re buying a piece of land for a specific purpose it is incredibly important to determine if you can even do what you intend to do with it. Zoning may prevent that. Buffer zones around water features may prevent construction entirely. Does the parcel lay near access to the type of internet connection that you need? The soil composition may not be suitable for a septic system. There may, or may not, be available connections to county or municipal sewer and water. Does the soil composition lend itself to holding up a building of a specific size and weight or will you need to bring in a soil blend that will permit that? Is access to the property going to permit both construction and the daily needs of that property? How much is it going to cost to clear cut trees and grade the site?
If these, and many more factors, might prevent you from doing what you want to do with it… why buy it without knowing what you’re getting into?
2. Are there deed restrictions, easements or factors affecting your ability to own or use the land?
Your agent should investigate the deed to obtain information about any liens or easements. This information may need to be verified by a professional surveyor and an attorney. This can help avoid serious obstacles in the future.
3. Are there environmental hazards, flood plain and other environmental risks?
Are setbacks going to pose a problem? Is an access easement needed to get to the property? Does the infamous blue line stream prevent construction where construction is intended? Buyers interested in purchasing land might need their agent to consult with environmental engineers to determine local regulations that can affect the use of the property.
4. Will zoning and land-use regulations prevent you from building?
Zoning regulations, HOA restrictions, restrictive easements and land-use classifications vary between municipalities, counties and communities. Often your agent will need to research public records, assessors and utility companies to discover liens, rights-of-way, easements, covenants and deed restrictions that may convey with the property. Not being aware of rules affecting properties can lead to serious legal consequences, lost money and lost time. You need to be certain that your land purchase will allow you to build the type of structure you intend to build and where you intend to build it.
5. Are you going to need approvals, consents and permits for the project?
Your agent should take all of that into account when setting a time for land purchase DD.
