To a new commercial real estate investor, vacant land transactions are often perceived as “simple.” There is vacant land, a buyer and a seller, and a closing. What’s the hold up?
If you’ve done enough of these deals, you know the details matter.
Whether the site is a future residential subdivision or mixed-use development, it’s important to plan for long-term protection before you’re left holding the bag. As you consider your next deal, here are three often-neglected legal concepts that can add real value to land deals.
1. Easements Should Be Flexible, Not Fixed
Access and utility easements are a given in most land deals. But when the property is surrounded by unplatted parcels or will be part of a larger development plan, boilerplate forms of easement might not be enough.
Rather than agreeing to a pre-canned easement, consider structuring it to be flexible and forward-thinking. Examples include:
- Relocation rights tied to future platting or development activity
- Defined procedures for adjusting boundaries based on engineering or permitting outcomes
- Built-in rights for expansion conditioned on progress of future development
The goal is to accommodate the evolution of the surrounding area while avoiding costly amendments and disputes.
2. Use Restrictions That Actually Work
When your target property value hinges on neighboring land use, recorded restrictions, when deployed thoughtfully, can make the deal. Conversely, vague or overbroad restrictions can break it after-the-fact.
Effective use restrictions should:
- Tie clearly to the property’s development goals
- Limit undesirable or incompatible uses nearby
- Avoid ambiguities that invite interpretation or legal challenge
Don’t settle for broad or ambiguous restrictions that will cause headaches down the road.
3. Post-Closing Agreements: Don’t Rely on Memory
Many complex land deals involve obligations that continue after the deed. Common points of negotiation include post-closing infrastructure construction, land planning initiatives, definitions of future development parameters, and cost-sharing agreements. If those terms aren’t captured clearly in standalone agreements pre-closing, they’re often forgotten or unenforceable once the dust settles.
Don’t overlook:
- Necessary access, utility, and infrastructure easements
- Infrastructure installation agreements that clarify design, timing, and responsibility
- Land use and development agreements that memorialize pre-approved modifications to boundaries, use, or development framework.
These documents aren’t just extra paperwork. They reduce risk, streamline future development, and protect your investment.
The Bottom Line
The right legal strategy not only protects your position today, but also ensures your project is set up for success tomorrow.
If you’d like guidance on structuring easements, drafting use restrictions, or preparing post-closing development agreements, please feel free to contact me. I’d be happy to discuss how to protect your interests in your next deal.
