In the real estate investment setting a good working definition for Due Diligence might be:  1) to investigate the material facts related to an investment, 2) to independently verify key information to discern deception, reduce risk and avoid harm.  In layman's terms it means know who you are dealing with and what you are getting into - what you don't know can be quite costly, so look before you leap.

Zoning and entitlement due diligence is similar to yet distinct from "environmental due diligence" or "environmental site assessment".  Its focus is not reviewing environmental contamination or lack thereof.  Instead, it focuses on whether the property can be developed, used or redeveloped for the purposes intended.  Did the borrower comply with federal, state and local requirements? Have zoning or permitting changes occurred which may materially affect the asset's real value? Are there other issues of regulatory compliance?.  These issues are not typically covered by appraisals or environmental consultant reports, yet may significantly affect the property and underlying loan.

The due diligence process for distressed assets or properties is different in current economic settings than in the recent past.  Many lenders are overwhelmed by the sheer volume of distressed property.  Personnel changes and passage of time make finding details on land and buildings a challenge.  Due diligence checklists and templates are of limited help, unless one knows where and how to look:  
Reversed area zoning opposition through collaborative negotiations and specifically crafted zoning documents.

Frequently found favorable prior official correspondence about zoning entitlements not part of appraiser, attorney or lender records.

Obtained local jurisdiction building inspection records, as-builts, and approved drawings to expedite sale of partially completed subdivisions, commercial sites and buildings.

Secured partial waiver of conditions on a Georgia Development of Regional Impact as part of the Due Diligence process.

Persuaded Atlanta area local government to accept vesting of partial project in lieu of enforcing newly adopted more stringent regulations.

Discovered executed but non-recorded third-party development agreement documents, which differed substantially from lender-held draft version.

Confirmed status of local and Georgia DOT performance and maintenance bonds, including several in various stages of being called without lender knowledge.

With lender approval met with jurisdictions to develop critical path “punch-lists” for erosion control and site development concerns to avoid local and Georgia EPD fines.

Calculated unpaid sewer tap fees and average daily flow for mixed-use commercial development.  Project which initially appeared to be over capacity for pre-purchased credits was determined to have remaining marketable credits.

Identified material changes in circumstances of adjoining properties, including annexations, rezonings and pending condemnation.  In some cases these helped the studied property, while in others previously unknown adverse impacts were identified.

Revealed costs-to-complete alone would substantially exceed market value of entire developments.

Determined multiple-ownership mixed-use development would exceed zoning allowances at build-out, if plans of independent parties were carried through.

Found out wall and site settlement cracks were because site was previously an undisclosed illegal dump.

Identified floodplain was not properly noted or studied in prior engineer’s work, which significantly overstated potential development of commercial property.

Confirmed subdivided outparcel transaction was not arm’s length and was intended to deny access to lender's property from approved curb-cut at median break.
Zoning Due Diligence Consultants
Development Entitlement Research
Due Diligence and Employment Contact
Real Estate Due Diligence Reports
Southeast Bank REO CREO Directory
Georgia Banking Crisis Directory
Local Government Zoning & Permit Compliance
Zoning & Due Diligence Expertise
Deep Water Planning, LLC

Real Estate Acquisition Due Diligence
Serving Atlanta, Georgia, the Southeast & Caribbean
Zoning Consultants
ALTA Endorsement 3.1 Reports
Georgia Banking Crisis Directory
Good news is what we look hardest to find and enjoy the most in revealing.  There's little better for the due diligence process and report to show than that a borrower has been completely honest, all required zoning entitlements and permits are in place, and that the jurisdiction is eager to work through any minor issues.  Even with the most complex residential project or distressed commercial property, good news can often be found and leveraged.
Mixed news and incomplete information can be choppy and is often the hardest to navigate through. The property is troubled, but workout may still be a possibility.  Civil engineering, architectural firms, contractors or other original consultants may no longer exist or may not want to talk unless paid.  You may need on-the-ground feet to serve as an extension of your staff, capture progress pictures, get honest answers from local government, glean insights from adjacent property owners, or find the kind of information we typically turn up.
Sometimes the lurking issues we discover are major and of real consequence.  These matters require extra care, because the long term effects on actual or perceived  value can be substantial or require zoning change to overcome.   We work carefully during the due diligence phase to diffuse potentially explosive situations, while maintaining credibility and critical relationships with permitting agencies and key parties to transactionally-related vital information. 
Experience in Georgia, Florida, North Carolina, South Carolina, Tennessee, and Alabama includes projects in 60 counties of Georgia alone 

Real Estate Due Diligence Reports

Documentation & Expertise for Regulatory Compliance