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
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.
- Reason property is for sale.
- Adjacent property owner opinions.
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.
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.
- 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 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.
- Construction survey.
- Existing buildings.
- Location survey.
- Site planning survey.
- Soil survey.
- Subdivision survey.
- Topographic survey.
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.
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.
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.