Due Diligence Information for a Residential Multi-Family Land Listing

By James Kimmons, About.com

Is the property zoned for the type of construction planned?:

This is pretty basic, but the zoning of land to be purchased for condominiums or apartments construction should be verified in writing by the appropriate jurisdiction that multi family housing can be constructed. Reliance on zoning maps, particularly in situations close to boundaries, can be a mistake. Multiple jurisdictions, such as county and city/town should all be researched.

Check the records for the specific piece of property, as it may be located in a specific zoning area but have other deed or prior situational restrictions on usage.

Know the building appearance requirements and restrictions:

With escalating land costs, many condominium projects aren’t financially feasible unless the units are built with multiple levels or stories. If height restrictions are too limiting, it isn’t a viable location for purchase.

Is the area in a historical or other specially-regulated zone where the outside look of the structures is regulated even more stringently than normal codes? Cost of construction can escalate dramatically if the buildings must be built to resemble those of a century ago.

Is ingress and egress sufficient or in need of improvement?:

Many municipalities have codes requiring minimum road widths that are greater if higher density projects are constructed with access through current residential areas. Though this will usually come out in the process, it’s much better to have this information up front. If streets must be widened, even if the town or county will fund it, it can take years.

Are utilities available, how far away and are capacities sufficient?:

The statement that utilities are “at the lot” is a common one. In residential single family construction, this is usually a safe statement upon which to rely. However, if 50 condominium units are the plan for a land purchase, gas and electric lines installed years ago for single family homes can be woefully small for the job. This will require significant and expensive upgrading and can take a long time.

Maximum land coverage limits can ruin building plans:

It’s becoming ever more frequent to see limits on the amount of square footage on a parcel that can be covered by building footprints or even by concrete for parking.

It can be expressed as a percentage of the overall lot size, as in 40%. If you have an acre of land, this would limit coverage to 17,424 square feet. If this limitation includes paving, it could make a project not feasible economically.

Don’t forget lot line setbacks and required parking space:

This is another rather obvious consideration. But be careful to determine the setbacks from all sides of the lot. They can vary, not only by side of the lot or orientation, but also based on what is across the street in some cases. Municipalities can also make special setback requirements based on the type of construction. An example would be increasing the setback for perimeter visitor parking for an apartment project in order to limit interior traffic.

Are there codes limiting the rental of the condominium units?:

Though these types of restrictions are normally set by the condominium developers, they can be in the form of municipal codes or area use restrictions. If it’s a vacation or resort community, buyers may want to do some vacation rental of their units. If that’s not allowed in the area, it can negatively impact unit sales.