Buying land for a new vineyard or buying an existing vineyard involves some pre-closing investigation to make sure the buyer’s plans will not be blocked or slowed by any surprises.
Once a parcel of land is identified in a region with a favorable climate, the careful buyer will go through a checklist of issues before closing. Some of the issues are obvious but some are not, particularly for someone who is buying a vineyard for the first time.
Among the things to investigate are the following:
- Review the seller’s books and recordsfor any current operations.
- Secure financing. An appraisal of the land and/or business may be necessary.
- Verify title. Obtain preliminary title report and confirm the seller’s ability to remove unacceptable exceptions. Verify legal description. Confirm access to public right-of-way. Verify property as a legal lot of record.
- Verify zoning compliance. Determine whether the zoning allows the proposed use. Become aware of any conditions imposed by variances, conditional use permits, and certificate of occupancy.
- Physically inspect the property. Look for any potential easements and encroachments. Consider obtaining a boundary survey. Inspect any improvements on the property and any equipment to be conveyed. Confirm the working condition of utilities at the site, if any.
- Determine if threatened or endangered wildlife are present. Landowners conducting activities that might incidentally harm endangered or threatened wildlife are required to provide protection from violating the Endangered Species Act.
- Verify soil condition for suitability.
- Confirm water rights, either surface or ground, and the transferability of the rights. If the rights or do not exist or are insufficient, determine if water is available and what permits would be necessary for the amount needed.
- Obtain a Phase 1 environmental assessment report. Examine the seller’s environmental records. Obtain representations and warranties from the seller regarding the environmental condition of the site. Evaluate the site’s development potential under CEQA (California Environmental Quality Act) and related laws.
- Obtain a search for UCC financing statements for personal property, fixtures, crops and timber and obtain termination statements, if necessary.
These are many but not all of the areas to be investigated before a successful closing. Patience and persistence are required, but an experienced wine law attorney will be familiar with these issues and able to help.
This post is published for general informational purposes and is not intended as legal advice.