Question 1

What is a vacant land contract?

Accepted Answer

Vacant land contract: a purchase agreement for undeveloped real property. In FL: the FAR/BAR Vacant Land Contract is the standard form. Key provisions: purchase price (the agreed price for the land), due diligence period (the buyer’s period to investigate: zoning, environmental, title, survey, soil, and feasibility), financing contingency (if the buyer needs financing: the terms and deadline for obtaining a loan commitment), title (the seller must deliver good and marketable title), survey (the buyer may obtain a survey during due diligence), and closing (the date, location, and closing procedures). The vacant land contract: differs from the residential contract (fewer inspection provisions; more emphasis on zoning, environmental, and feasibility).

Question 2

What due diligence should be performed on a Florida vacant land contract?

Accepted Answer

Due diligence: zoning verification (confirm the current zoning and future land use designation; check for any pending zoning changes), environmental assessment (Phase I ESA: identify potential contamination; Phase II if indicated), flood zone (obtain a FEMA flood determination; check for: flood insurance requirements and building restrictions), survey (ALTA survey: identifies boundaries, easements, encroachments, and topography), soil testing (geotechnical analysis: determine soil bearing capacity and suitability for construction), utility availability (confirm: water, sewer, electric, gas, and telecommunications), and impact fees (estimate: transportation, school, park, and utility impact fees). The contract: should allow sufficient time for all due diligence.

Question 3

What are common contingencies in a Florida vacant land contract?

Accepted Answer

Contingencies: due diligence (the buyer can terminate during the due diligence period for any reason: this is the most important contingency), financing (the buyer’s obligation to close is contingent on obtaining financing), title (the seller must deliver marketable title; the buyer can terminate if title defects are not cured), zoning (the buyer’s obligation is contingent on the land being zoned for the intended use or the buyer obtaining rezoning), environmental (the buyer can terminate if environmental conditions are unacceptable), and feasibility (the buyer can terminate if the development is not economically feasible). Each contingency: should have a specific deadline and termination procedure.

Vacant Land Contract

Vacant Land Contracts

Key Provisions

Due Diligence

Contingencies

Related Terms

Barnes Walker Real Estate

Ready to Get Started?