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Due Diligence of a Development Site

Before you commit to buying a development site, carry out a due diligence investigation to safeguard your investment. Surely you do not want to end up purchasing a problem site, a lemon or paying too much, do you?

Do not fall into the trap of believing an overzealous real estate agent's claim on what can be built on a site!!

Individual circumstances of each site has to be assessed to determine their development potential and possible contraints. Your site need to be assessed against local laws, through planning scheme provisions including zoning, overlays and codes and against related registers such as flooding, contaminated sites and past approvals.

Titles

Check ownership details. Are there any encumbrances on title? Read more... 

Zoning

If your site does not have development approval (or DA) find out what can it be used for or what can be built on it under the existing planning scheme. Read more...

Contamination

Land contaminated by former waste disposal, industrial and similar activities is often discovered during changes to land use - for example, an industrial manufacturing complex is demolished to make way for a residential development.

Typically sites where pollution of land and/or groundwater poses an unacceptable risk to human health or to the environment require costly clean-up, monitoring and/or institutional controls.

Before buying a development site find out whether it is listed in the EPA Priority Sites Register? The last thing you want is to unknowingly purchase a contaminated site and be ordered to remediate the problem. In Victoria liability for site contamination rests mainly with the polluter or the occupier of the premises. However, the broad definition of occupier is such that 'innocent' persons (i.e. those who did not cause the contamination) may be liable although they may be able to recover remediation costs from the actual culprit (the polluter). 

The impact such liability may have on a property's value reinforces the importance of due diligence investigations at the time of purchase.

Heritage and Archeological

Pay particular attention to identification and protection of cultural and historic heritage sites including those associated with Aboriginal heritage. Sensitive areas could include sites with historic values, including landscape and building elements, meeting places, burial grounds and places of historical or cultural significance to the Aboriginal community.

Resolving such matters can introduce significant delays and expense to the planning process, and impact on the development potential of a site, which in turn will have direct adverse effects on the site value.

Flooding

If your site is located close to a creek, a river or a lake, it is most likely to be included in a land subject to inundation overlay?   A flood report from your local Council would confirm this. 

However, even if the flood report gives your place the all-clear, there is still the possibility of overland flow, which basically occurs when there's more water than the underground drainage system can handle, causing the excess water to back up causing flooding.

Flora and Fauna

Mature native trees and native grass lands and other vegetation can be a significant constraint on the development potential of a site and they must be taken into careful consideration. Some planning authorities require off-set plantings to be undertaken to compensate for any loss of vegetation. To accommodate such off-set plantings require land, which can be a significant constraint on development and feasibility of a project.