3.10 Take Final Actions

Exercise the Option or the Waive Contingencies

Project proponents should Exercise the Option or the Waive Contingencies. This is the action that legally obligates the organization to acquire the land or resources. Consequently, project proponents must be certain at this point that they want to acquire the land or resource interest and that any risk associated with the acquisition is acceptable.

Review Closing Statement and Final Instructions

Closing Statements and Final Instructions should be reviewed. All necessary funding should be in the Escrow. Fees, costs, and funds should be allocated correctly.

Acquire Performance Bond

Lease-specific Issues: In some cases land and resource owners (usually government agencies) require project proponents to acquire performance bonds prior to entering into leases. Performance bonds may be used by authorizing agencies for several reasons, including: if lease rents are not paid; if lessees fail to perform as per substantive lease requirements; and to remove lessee-installed improvements at the end of the lease.

Receive Regulatory Permits

All regulatory permits required as part of the project should be received at this point, prior to entering into a lease or executing the purchase.

Perform Final Walk-Through of the Property

A final walk-through of the property should be performed to ensure the status and condition of the site has not changed while the project was being developed and the acquisition was being negotiated.

Ocean and Coastal-specific Issues: For obvious reasons it is often difficult, if not impossible, to walk-through lands and resources lying within ocean and coastal waters. Given the amount of time that has passed during development and negotiation of the acquisition, as well as the location and use of the land and resources (i.e., a short amount of time has passed and the site or resources are located in a remote, infrequently used location), a site visit may not be necessary. However, if a site visit is desired, timing the visit with low tides will be beneficial for intertidal areas and accessing the area with boats, SCUBA, or underwater cameras may be necessary for subtidal areas.

Sign Purchase and Sales Agreement

Fee-title-specific Issues: The Purchase and Sales Agreement should be signed by both the Seller and the Buyer. Contingencies in the agreement should be made for outstanding issues related to corporate/board approval, regulatory permits, and due diligence.

Gain Final Approval

Some organizations require that final approval be given by the corporate or board prior to closing.

Authorize Closing

The project manager should authorize in writing closing the sale or executing the lease, at which time the escrow (if applicable) can close.

Execute Lease or Deed

The transaction must finally be closed by executing the lease or deed. Each party must sign and receive copies of the lease or sales agreements. At this point, funds and the title or lease should be transferred and the deed or memorandum of lease should be recorded or filed at the appropriate public office.

Lease-specific Issues: Government agencies often require other parties to sign documents prior to their signature.

Acquire Title Insurance

Fee-title-specific Issues: Concurrent with closing the deal, a title insurance policy that indemnifies the policy holder (i.e., the buyer) for loss sustained by a title that proves defective should be acquired.

Lease-specific Issues: Organizations should consider acquiring title insurance policies for leases as well. The cost of the title insurance policy should be weighed against the cost of the lease.

Pay Closing Costs

The final action is for the buyer (i.e., project proponent) to pay closing costs and taxes (if sales or lease excise taxes, or other taxes need to be paid), and consider purchasing liability insurance for property.