24th January 2015
Property development can be a profitable business if you ‘buy low, sell high’, or so the saying goes.
However, even the most seasoned of property developers can get tripped up for neglecting to consider the basics. So, whether you are considering your first development or your fifty-first, the same principles will apply.
Make sure you are given a clear plan showing the extent of the land and buildings you are buying and verify the seller’s title against it. We can arrange for a surveyor to accompany you on a further site inspection with the title plan to assess the position fully.
Be aware of all of the planning conditions affecting the site and any related obligations; such as payments under the section 106 agreement or the community infrastructure levy.
Check that access to your development can be obtained either from the adopted highway or with consent across land owned by a third party.
There may be a gap between the land you are buying and the adopted highway. This could be an error on a historical plan, which may require formal rectification. Or it could be an intentional ‘ransom strip’, where a third party has withheld land to recover a premium in exchange for granting the required access rights.
We can establish who, if anyone, owns the surrounding land by making enquiries with the local highway authority.
If you are buying part of a larger site, you will need to ensure that you have agreed adequate rights of access, both whilst you are carrying out the development and for the subsequent use by the owners and occupiers of your development.
Budget will be the deciding factor for any developer. Establish whether VAT is payable from the outset. If the VAT inclusive purchase price pushes you over the £2 million stamp duty land tax threshold, it may have serious implications on your budget.
Is the seller expecting you to pay any overage? This is an additional sum payable to the seller after you have completed if, for example, you subsequently secure a more profitable planning consent. Your solicitor will make sure you are aware of any extra payments that are due from you, now or in the future.
Does the site benefit from connections to mains services? Are there any existing sewers or other pipes or apparatus under the site that may affect your ability to build over them? An inspection of the title and carrying out specific services searches will assist.
If you are considering a new property development project, taking legal advice at an early stage will help you maximise your return on investment.
For advice from Myers & Co Solicitors, based in Stoke-on-Trent, Staffordshire, contact 01782 577000 or email info@myerssolicitors.co.uk.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
