Contractor risks
Methods for conducting thorough due diligence on property titles and easements before beginning construction work.
A practical, evergreen guide detailing robust due diligence practices for property titles and easements, ensuring construction projects start on solid legal ground, avoiding costly interruptions, and protecting long-term investment value.
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Published by Justin Walker
August 09, 2025 - 3 min Read
Before any shovel meets soil, a disciplined title and easement due diligence plan should be in place. Start by assembling a competent team that includes a title professional, an experienced surveyor, and a construction attorney who understands local land use regulations. Define the scope of review to cover chain of title, lien status, deed restrictions, and any easements that affect access, utility rights, drainage, or drainage, among others. Gather historical records from the county recorder, property tax assessor, and municipal planning offices. Verify parcel boundaries and compare them with prior surveys to identify discrepancies that could complicate permitting or future improvements. Your goal is a risk-adjusted understanding of exactly what rights attach to the land.
As you dig into documentation, look beyond the obvious questions. Evaluate whether the title history reveals gaps in the chain or contested ownership, which could jeopardize clear transfer at closing. Inspect encumbrances such as mortgages, mechanic’s liens, judgments, and property tax delinquencies that might trigger late releases or title defects. Pay close attention to any easements or covenants that could constrain development options; some rights may require maintenance obligations or limit building footprints. Confirm that subterranean rights, such as mineral or water access, are not implied if they are not part of the project. Document every finding with precise references and attach copies of critical documents for future audit purposes.
Clear documents support a smoother permitting and construction phase.
A robust due diligence process benefits from a layered approach that mirrors risk assessment in real estate. Begin with a title commitment from a reputable insurer and then compare it against public records. Engage a survey professional to confirm legal boundaries and to locate any encroachments that could complicate site layout. Review recorded easements for legal descriptions, parties involved, and term lengths, ensuring they align with project timelines. Cross-check with utility providers to identify existing connections and any planned work that could alter access routes. Record findings in a structured report that highlights defects, uncertainties, and recommended remedies. This documentation becomes a living roadmap used to negotiate solutions before construction starts.
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In parallel, evaluate zoning and land-use constraints that intersect with ownership details. Confirm that the property’s current use complies with local master plans and neighborhood ordinances, and that any variances needed are in process or secured. Document any active or pending litigation that could cloud title or threaten enforcement of covenants. Investigate historical easements that may no longer be active but appear in older deeds, as these can create unexpected access rights during construction. Prepare a mitigation plan outlining steps to address each issue, including potential substitutions of easements, removal of conflicting covenants, or renegotiation with affected parties.
Proactive remedies can safeguard project timelines and budgets.
A disciplined review of title documents requires attention to detail and clear accountability. Assign ownership of each document type: title commitment, survey maps, deed histories, and easement records. Establish checklists with specific criteria for what constitutes a defensible title in your jurisdiction. Use parallel sources to corroborate each claim—from federal and state databases to local property records—to reduce the risk of missing a subtle but important defect. Create a timeline that aligns closing, permit approvals, and critical construction milestones. Include a risk register that assigns responsibility for pursuing each remedial action, so nothing falls through the cracks. A well-documented trail strengthens negotiations and protects against costly delays.
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As issues surface, prioritize remedies that deliver measurable value without derailing budget and schedule. Common fixes include negotiating easement improvements, obtaining waivers, or securing private agreements to acknowledge continued use with clarified responsibilities. Consider obtaining an extended title policy that covers known defects as well as latent risks discovered during due diligence. If encumbrances cannot be removed, evaluate alternative site layouts or utility corridors that minimize disruption. Engage engineers to redraw site plans when necessary to respect legal boundaries and to optimize drainage and access. By planning contingencies now, you preserve project viability even when surprises arise.
Expanded record checks reduce hidden vulnerabilities.
Real-world due diligence demands a careful evaluation of all parties involved in the property’s chain of title. Confirm that previous owners had the legal authority to convey interests and that any transfers occurred with proper endorsements. Investigate whether any contingents or executors were involved in the transaction, and whether probate or estate issues could reappear later. Check for potential conflicts among multiple lien holders, such as subordination agreements or payment priorities that could affect financing or construction draws. If a third party claims rights under a prior agreement, assess the likelihood of successful assertion and the impact on project plans. When needed, employ specialized counsel to arbitrate disputes and interpret complex chain-of-title language.
Trustworthiness of the title search hinges on the completeness of the record search. Expand beyond county records to include municipal easement records, school district rights, and transportation authorities’ right-of-way documents. These sources often reveal long-standing access permissions or restrictions that aren’t obvious from a standard title report. Validate whether proposed improvements could intersect with such rights, potentially requiring re-routing or mitigation strategies. Document any incongruities or missing indexes and pursue authoritative corrections before ground-breaking. This diligence minimizes the risk that a seemingly secured parcel becomes legally contested during construction, causing expensive delays and redesign costs.
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Aligning utilities with construction plans prevents outages and delays.
A focused look at easements should identify both explicit and implied rights that affect construction. Map every recorded easement onto a current site plan, including the grantee, purpose, scope, and termination conditions. Seek to understand maintenance obligations, access hours, and responsibility for repair of utilities or improvements within the easement area. Where an easement benefits neighboring properties, anticipate potential conflicts that could arise if they sue for interference or if use changes due to new development. If any ambiguity exists, request updated documents or a legal clarification from the holder. Documenting the precise status of each easement yields clearer budgeting and reduces negotiation friction with adjacent landowners.
Coordination with utility providers is essential to verify both current and future service rights. Obtain official maps showing existing underground lines, fiber optics, and water or gas mains, and compare them with the proposed footprint. Contact the utility to confirm whether easements grant sufficient access for maintenance or if temporary disruptions could occur during construction. Verify that any required line relocations, upgrades, or crossings are permitted within the project’s timeframe and budget. If proposed work could affect service levels, schedule coordination windows and establish a point of contact for rapid issue resolution. This alignment helps prevent costly outages or schedule slips in critical early phases.
When diligence reveals defects, a proactive communications strategy becomes essential. Notify all relevant stakeholders promptly, including porters of title, lenders, and municipal authorities, about identified issues and proposed remedies. Maintain a transparent record of conversations, offers, and counteroffers to facilitate later negotiations. Prepare formal amendments or addenda to the purchase agreement that reflect corrected boundaries, adjusted easements, or revised closing conditions. Seek consensus through collaborative problem-solving, balancing risk with project feasibility. If necessary, re-solve financing terms or adjust project scope to accommodate corrected conditions. A disciplined communication plan minimizes friction and helps preserve goodwill during complex title resolutions.
In sum, the best construction projects begin with rigorous title and easement due diligence conducted by a coordinated team. Establish a documented workflow that integrates title searches, survey validation, land-use reviews, and utility coordination. Create a risk register that assigns clear accountability and deadlines for each corrective action. Build relationships with seasoned professionals who understand local quirks and who can expedite fixes when needed. Maintain a living set of records that can be updated as new information emerges during negotiations and permitting. By investing time and resources in thorough early diligence, you secure a smoother path to permitting, financing, and on-time construction completion.
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