Are you considering buying commercial property, so you can build a building for your business? Before you take that step and become a land developer, you need to do your due diligence. Here are five items that should be at, or close to, the top of your list of priorities:
Do you know what the zoning of the property is? Do you know if what you want to do is allowed under that zoning? You need to know the answers to those questions before you sign a contract to buy commercial property for your business. Certain uses, even if they are allowed in the property’s zoning category, may require a “conditional use approval” or a “special exception”. For example, in the City of Port St. Lucie, a restaurant is an allowed use in the Commercial General zoning category, but if the restaurant will include a drive-through, a “special exception” approval must be obtained from the City.
Do you know if water and sewer service is available to the lot? If not, you could be required to run water and sewer lines from the nearest point of connection, to the property, at your expense. In addition, if there is insufficient utility capacity in the area you may not be able to connect at all, or you could be required to pay for expensive capacity improvements.
Traffic Concurrency/Turn Lanes
If your business will generate significant traffic, the capacity of nearby roads and intersections could be an issue. As a part of the approval process, the city or county will review your traffic impacts and you may be required to provide a traffic report. If nearby roads or intersections are at or exceeding capacity, you could be required to pay for expensive, off-site traffic improvements to accommodate the traffic your business will produce. You should also confirm whether you will be permitted full access into and out of the property (right and left turns in and out), and whether you will be required to construct turn lanes on the adjoining road.
Don’t Close Until You Have Your Approvals In Place
When land developers buy land, their purchase contracts almost always provide that they do not have to close until after they have all of their land development approvals in hand. If you are buying commercial property to build a building for your business, you should do the same thing. Your purchase contract should be drafted to give you the time you need for due diligence and the approval process, and should allow you to walk away if you can’t get the approvals to build your building.
Hire Expert Help Immediately
As the saying goes, don’t attempt to do all of this on your own. The earlier you get your professional team involved, the better. Your attorney can make sure the contract is drafted with the conditions you will need. Your engineer can help you with due diligence to make sure that your building, parking, drainage and setbacks will fit on the site. You will also want to get soil borings, a title search, a survey and a pre-application meeting with the city or county, scheduled quickly after signing the contract, so you can hit the ground running and meet your deadlines under the purchase contract.
By following these five (5) steps outlined above, you’re on the path to success as a land developer.
About the Author:
W. Lee Dobbins is a shareholder in the Fort Pierce office of Dean Mead. He practices in the areas of zoning, land use and commercial real estate transactions and is a member of the firm’s Real Estate Development team. He represents property owners in the acquisition and development of land, including negotiating complex purchase contracts, due diligence, financing, title issues, closings and obtaining zoning and land use and site plan approvals from the local municipalities. He may be reached at firstname.lastname@example.org.