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Jane Chen
Sales Representative

RE/MAX Realtron Realty Inc.
Independently owned and operated

Phone: 905-470-9800  Fax: 905-470-7770  Mobile: 416-418-9568

Purchasing Vacant Land

January 24, 2013 - Updated: January 24, 2013

If you or your client is considering purchasing vacant land or purchasing a property where you intend to tear down the existing dwelling and rebuild, it is important to recognize and understand that this is not a standard or typical real estate transaction.  With a transaction of this nature, there are many issues that should be addressed prior to signing on the dotted line.


In transactions like these it is very important that you consult with a team of professionals as early as possible in the process.  This means that you should involve your realtor, lawyer, mortgage broker or lender before the transaction is firm and binding.


When purchasing vacant land or a property that you intend on developing, it is imperative that you do some research prior to signing the Agreement of Purchase and Sale. There are several reasons for this.


Most importantly, you cannot simply assume that your future development plans for the property will be achievable.  This is why I always advise clients who are either purchasing a piece of vacant land or a property which they intend to tear down and rebuild to make the Agreement of Purchase and Sale conditional for a reasonable period of time to allow you to make the necessary inquiries and conduct your due diligence to confirm that your future use intentions will be achievable.


During the conditional period there are a number of issues that need to be investigated and researched.  These are in addition to the usual clauses related to inspection and financing.  Here is a list of some of those issues and action items:


  1. Attend at the municipal building department to confirm as to the availability of building permits for your future intended use. 
  2. Have your architect or surveyor attend with you at the building department as it may be necessary to submit plans or drawings in order for the municipality to give approval to your plans
  3. Review the site plan agreement
  4. Ascertain if there are any restrictions on building, any issues with setbacks, lot density, zoning or other issues that could affect your future use plans
  5. Verify that there are municipal services available to service the property
  6. Determine if there are there any lot levies or costs that would apply to your plans
  7. Determine if there any environmental issues that need to be addressed
  8. Determine if the property is under the jurisdiction of the conservation authority or heritage designation
  9. Obtain an up to date survey of the property
  10. Determine if are there any other special conditions or restrictions that could prevent you from building on the property


All of these issues need to be investigated prior to making your offer firm. This is why it is important to communicate with your realtor so that your realtor can make the offer conditional for an appropriate amount of time to allow you to do your due diligence to uncover any issues or roadblocks that would affect your future use plans.


Failing to take these precautions can lead to disasters when the buyer finds out after closing that it cannot build its dream house or complete its intended renovation.  The purchase of vacant land or land that will be developed is unlike a typical residential house deal. Protecting yourself and your client by recognizing this will allow the transaction to close without surprises.


By: Lorne Shuman





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