Location, location, location is what every broker will tell you and they are right, but before you start your construction project there is much more that you should inspect before you decide to buy a plot or an existing building; a broker will not be able to help you with these technical topics.
Summary
- Zoning plan
- Soil survey
- Aerial Photos
- Ordnance suspicion area
- Existing connections and cables on the plot
- Existing drawings
- Location
- Borders
- Trees and bushes
- Debris
- Land register excerpt
What should we check Before visiting the plot?
Don’t go into the first site visit without being prepared. There is a great deal of information that can help you detect some of the risks.
Zoning plan
Check the zoning plan to ensure that you are even allowed to build the kind of building that you are planning there. If you want to build a car showroom, but the zoning plan says only residential units are allowed, then you’ll have a problem. A lot of brokers miss this critical step.
In addition, the zoning plan will determine the maximum size of the building
Soil survey
Ask the owner if he has a current soil survey report. Contaminated soil can cost you a massive amount of money, as the soil needs to be tested in a lab, and dependent on the degree of contamination, it needs to be taken to various factories for cleansing. These costs are not to be underestimated. On top of that it will most likely cause delays, as the testing of the soil takes one to two weeks and you’re not allowed to get rid of it before the testing has been completed.
By the way, a soil survey will also show you the depth of the ground water. If your building has an underground parking garage and the ground water is higher then the bottom of that garage, you’ll be constantly pumping water out of the construction pit. Remember when you were a kid on the beach and the water kept filling up the hole that you had dug? The effect in the underground garage is similar. These measures can also be extremely expensive.
If they don’t have a soil survey, it is strongly recommended to conduct one yourself before buying the plot, as the costs for contaminated soil can make or break the project.
Where to find this information: You can ask the owner, or you can conduct your own survey before buying. Search online for “Bodengutachten + city” and numerous companies will appear.
Aerial photos
Research the history of the plot. For example, in Berlin many of the images are now digitalized and you can find aerial pictures dating back to World War II. If you can see that there was a factory located on the plot then you know that the risk of contaminated soil is very likely.
Where to find this information: city hall or online (Example for Berlin: https://fbinter.stadt-berlin.de/fb/index.jsp)
Ordnance suspicion area
If you’re buying a plot in one of the big cities, you need to think of ordnance remains from World War II; the authorities will be able to tell you if your plot is designated as an ordnance risk. If so, you’ll need additional funds for a specialized ordnance removal company to do scans of the plot before you start digging. But be aware! The lead times on these results from the authorities are very long at the moment in most major cities; we are talking about months here.
Where to find this information: City hall
Existing connections and cables on the plot
Ensure that there are no major power lines, telecommunication lines or drainage pipes running through your plot. If they are you will have to pay for the cost of moving them yourself and these costs are not to be underestimated, as often only certified companies are allowed to do it.
Where to find this information: Make your life easier; search online for “Leitungsauskunft”. Multiple companies will pop up who will handle the communication with the numerous suppliers (telecommunication, power, water, etc.) for you. You’ll get a need report, as well as drawings showing any connections that are on your plot.
Existing drawings
Are there topographical surveys, that show the borders of the plot? Does the owner have other drawings? Just ask; more often than not there is more information then you or the broker think there is.
Where to find this information: through the broker or the current owner.
What should we check when visiting the plot?
Location
Check that the location suits your needs. Will customers be able to see your building? Is it on a busy street, or hidden somewhere on a side street? Where is the competition located? Where are your other buildings located? Does the location fit with your strategy? How many residents does the city or the neighbourhood have? Do these residents belong to your target group?
Borders
Take the topographical plan that you received in the first step and check out the borders of the plot together with the broker. More often than not, these are not easily recognizable, or they may even have been overbuilt by the neighbours.
Trees and bushes
Check for are any large trees; the need for a tree cutting permit is regulated very differently from state to state in Germany. Nevertheless, as a rule, trees that have not yet reached a trunk circumference of 60 cm may be felled without a permit, but check with a specialist before you start cutting. The authorities will also check the plot to see if any protected wildlife is living there. It may seem like just a couple of bushes to you, but to an endangered salamander or certain birds it may seem like the perfect home.
Keep in mind that you are not allowed to cut down trees in the breeding season in Germany. This may impact your timeline and therefore the completion date of your building.
Debris
If there’s debris on the plot, then negotiate with the owner to clear it from all debris for you. That saves you some money and, more importantly, time.
We have done our checks; what’s next?
Land register excerpt
Check the land register excerpt to ensure that there are no financial surprises hidden. Otherwise the bank will contact you with the unpleasant message that there is still a debt to be paid on the plot.
Contract
Then you can go into the negotiations. With all this information you’ll have a much stronger case to negotiate a fair price, so the investment in time and money will pay for itself during this stage.
Items to pay attention to in the conditional purchase agreement will be handled in a future blog post.
What if there is an existing building on our plot?
Have no fear, the next blog post will answer this question for you in detail.