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Caution: Don’t Buy Land For Your Church Development Without Due Diligence

My friends at Loveland Nazarene called me not long ago to take a look at a piece of land that they were planning to buy.

They had sold their existing building and found a beautiful piece of land that they were getting set to close on; it was about 15 acres. The church had money from the sale of their building so they could pay cash for the land. They were very excited. When I looked at the land it seemed a little bit strange because the property next to it had been developed by a residential developer who had put in a fairly large subdivision. But the line that joined the church’s property – the property they were looking to buy – and the subdivision had a curve to it.

Normally, when you’re laying out a residential subdivision, you don’t do curves. It’s not a practical use of the land. So, I went home and pulled it up on Google Earth and started looking at it wondering, “Okay, why would this be curved?” Since it was a very defined radius, I made a circle and continued the radius and  went right to the center of it. What I found was a gas distribution company that distributes all kinds of gases like propane and methane. The radius drew a perfect circle around their main storage tank  – which was about 750 feet away from the closest residence. But the church property was in between the main storage tank and the closest residence. It made me curious as to why the developer had not built on the land that was being offered to the church.

When I called the city of Loveland and asked why the land was developed like that, they said, “Oh that’s the blast zone.” I thought, “Great, so Loveland Nazarene is going to buy this property. They are going to build a church and a daycare center in what is considered the “blast zone” of a gas distribution company.” The church felt it probably would not be a problem. They knew it was a good deal on a beautiful piece of land.  They were going to go ahead and buy it anyway. This is where most people, even architects would probably say, “Okay, the church wants to do it, let’s go ahead and develop it.”

It did not seem smart so I contacted the two largest church insurance companies: Brotherhood Mutual and Church Mutual. I sent them a picture from Google Earth of the property with the blast area noted and asked if they would insure a church and a daycare center if we built on that property. Their answer wasn’t just, “No,” it was “Heck, no.” Happily, I was able to go back to the church and give them the vital information.

Without my thorough investigation the church would have bought the land, hired and architect, and possibly built a building that included a daycare, that they could have never insured.  Because you don’t secure insurance until a project is completed, they would have had a building and no way to occupy it because it was uninsurable.

Let me help you with your due diligence.

Brad Oaster, at 719-440-4378

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