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Development Due Diligence Checklist [Download Free Template]

Development Diligence Checklist Template

Among all of the different real estate investing opportunities, purchasing and developing raw land presents the greatest risk. Some unknown factors and issues only surface once you break ground, whereas other complications may arise from improper knowledge of the market, investigations, and due diligence. To help negate these risks, DealRoom professionals have prepared this Development Due Diligence Checklist to help you navigate your next development venture.

Our checklist is:

  • Tailored for auditing and appraising targets land development investments.
  • Requests concentrate on the general, physical, legal, survey, governmental, and financial aspects of the deal
  • Checklists are customizable to meet the specific circumstances of your deal

What Tasks does the Development Due Diligence Checklist Include

General Information

The General Information tab of Development Due Diligence presents an overview of the investment. Data required includes the site’s address, information about the seller and neighbors, and the site’s history.

ITEMS IN GENERAL INFORMATION DUE DILIGENCE INCLUDE:

  • Site address.
  • Seller information.
  • Seller contact information.
  • Neighbor contact information.
  • History of previous uses of site.
  • Tax liens.
  • Appraisals.
  • Reason property is for sale.
  • Adjacent property owner opinions.

Physical Site

Inspecting and surveying the investment’s physical site will help you spot potential issues and ultimately appraise value. Not all land is accessible to utilities such as sewer, electricity, and natural gas. The difference between “onsite” and “nearby” utilities could potentially cost thousands when trying to connect the property. Information needed here includes details about the utility companies, their contact information, area maps, and mineral, oil, and gas rights.

ITEMS IN PHYSICAL SITE DUE DILIGENCE INCLUDE:

  • Contact utility companies with site details.
  • Plans, maps, and detail about utility services running across the site.
  • Utility constraints.
  • Mineral, oil, and gas rights.
  • Environmental and engineering reports.
  • Square footage.
  • Walk the site and pictures.

Legal

You must execute proper due diligence on licenses, zoning, and the title to ensure that your property complies with local guidelines, environmental protections, and regulations. This can prevent thousands in fines and fees down the road. Information and documents required includes licences, way leave agreements, zoning and title information.

ITEMS IN LEGAL DUE DILIGENCE INCLUDE:

  • Report on title (to be done by solicitor).
  • Deeds and title information.
  • Ownership (including boundaries and possible disputes).
  • Way leave agreements (telecommunications, electrical networks, etc.).
  • Current licences.
  • Easements.
  • Restricted covenants.
  • Listed buildings.
  • Conservation and other designated areas, i.e. state and national parks.
  • Building regulations approvals.
  • Statutory waterways and any associated restrictions.
  • Railways and any associated restrictions.
  • Car parking arrangements.
  • Existing occupants and illegal occupation.
  • Zoning verification.
  • Zoning restrictions.

Site Surveys

Site surveys utilize the principles of mathematics, geometry, and other related sciences to measure and reveal more information about a site. These can draw attention to potential problem areas. Listed below are a variety of different site surveys. Not all of them may be applicable to your deal.

ITEMS IN SITE SURVEY DUE DILIGENCE INCLUDE:

  • Air quality.
  • Asbestos, lead, and other hazardous materials surveys and registers.
  • ALTA/ACSM survey.
  • Boundary survey.
  • Contamination.
  • Construction survey.
  • Ecological.
  • Existing buildings.
  • Location survey.
  • Site planning survey.
  • Soil survey.
  • Subdivision survey.
  • Topographic survey.

Governmental Opinions

Local leaders can have a large impact on the community’s real estate. During the planning phase, it is important to connect with some of these parties to gather support on the project. Different groups include police, local officials, and the zoning department.

ITEMS IN GOVERNMENTAL OPINIONS DUE DILIGENCE INCLUDE:

  • Planning and zoning department.
  • Engineering department.
  • Police department.
  • Public works.
  • Water and sewer departments.

Financial

As in any transaction, you need to ensure that the seller has a clean record and sound financial practices. To investigate this, you will need their transaction history and terms of the sales. Additionally, financial due diligence includes utility verification and fee schedules and impact feeds.

ITEMS IN FINANCIAL DUE DILIGENCE INCLUDE:

  • Seller's transaction history.
  • Terms of seller's previous transactions.
  • Seller's debt on property.
  • Utility verification and fee schedules.
  • Impact fees.

FAQ

Can I change requests in this checklist or add new?

Every M&A and due diligence process is different. Downloaders are urged to make these checklists their own by changing the providing information to better fit their needs.

Does this questionnaire provide all the necessary due diligence information?

This development due diligence questionnaire was created by and for M&A professionals and includes a comprehensive starting point for any diligence process. Every deal is different, however, and may require additional requests or diligence areas.
Easily Collect Data Using this Due Diligence Template in DealRoom
This development due diligence template can be easily downloaded and utilized as just the Excel sheet. However, it is most effective when paired with DealRoom’s due diligence software. We offer a secure space to conveniently request, collect, and house data. Additionally, DealRoom offers analytics, security features, and customized help to streamline the process. We are confident that with DealRoom you can close deals up to 40% faster.
How to use the template with DealRoom:
  • Download the due diligence template from DealRoom’s website
  • Open a room within DealRoom
  • Go to the Requests tab and select “import”
  • Import the downloaded template

The Requests tab is automatically populated with the requests from the due diligence template. Users can begin assigning, adding to, and completing due diligence requests.

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