Pre-Construction Considerations In Acquisition Of Land In The Middle East - Construction Contracts Law Report

    11 May 2012

    There are several other factors that must be addressed before those that deal with the construction of the improvements. Often they involve the consideration of the legal vehicle that should be used to acquire, develop, or operate the property. In addition, factors relating to the acquisition of the property itself, regardless of whether the property is unimproved and is being acquired with the intention of constructing improvements thereon, or the property is partially improved and involves additional construction in order to complete the improvements, must be considered. Preconstruction factors include, among other things, title issues; survey issues; land use approvals, such as zoning and building permits; lot size and set-back issues; environmental and hazardous waste issues; availability of utilities; access; and the physical characteristics of the property, such as soil and slope stability and drainage. Typically, in a purchase and sale agreement entered into by the buyer and the seller, the buyer is granted a due diligence or inspection period within which to evaluate the foregoing matters in order to determine the advantages and risks inherent in the property being considered for purchase. During this period, the buyer customarily obtains a title commitment and survey and then reviews the matters disclosed therein in order to assess the legal encumbrances affecting the property. In addition to this right to evaluate the property, the buyer may often desire to incorporate into the sale and purchase agreement the right to assign its rights under the agreement prior to closing to an affiliate, based upon tax and other considerations relating to the intended ownership, development and/or operation of the improvements.

    Reprinted with permission from Construction Contracts Law Report, Volume 36, Number 10, May 11, 2012, © 2012 Thomson Reuters/West. For additional information about this publication, please contact Customer Service at 1-800-328-4880, or visit West on the Internet at

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