Question: International Paint Company wants to sell a large tract of land with several facilities on it to U.S. Parts Inc. As acquisitions manager for U.S. Parts, what do you need to know before buying this land, other than that International Paint has good ownership, that your company needs the site, and that the price is right?

Expert answer

1. Environmental regulations and compliance: Any land purchase should take into account any environmental regulations that may apply to the property. For example, if the land is located in an area with stringent air pollution regulations, this could impact the costs of running a business on the site. It's important to be aware of any potential regulatory compliance issues before making a land purchase.

2. Zoning requirements: Another important consideration when purchasing land is whether the zoning requirements of the area allow for the type of business you intend to operate. If not, you may need to obtain a special permit or variance, which can add time and expense to your project.

3. Infrastructure: It's also important to consider the condition of the infrastructure on the property, including roads, water and sewer lines, and power. If the property requires significant upgrades to the infrastructure, this can add to the overall cost of the project.

4. Site remediation: Another potential issue to be aware of is whether the property has any contamination issues that will need to be addressed. This can include things like asbestos or lead in the soil, or groundwater pollution. If remediation is required, it can add significantly to the cost of the project.

5. Liens and encumbrances: It's also important to check for any liens or encumbrances on the property before making a purchase. This could include things like outstanding mortgages or tax liens. These can often be resolved, but it's important to be aware of them before making a purchase.

6. Title insurance: Finally, it's always a good idea to obtain title insurance when purchasing land. This will protect you in the event that there are any problems with the title to the property.