Recruitment update

6 questions to ask when buying land for development

You may be an experienced developer or someone who is looking to buy a piece of land for the first time, but the goal will always be the same: to ensure a good return on your investment.

There are several factors to consider before settling on a parcel of land. Whilst it is often tempting to rush ahead and get your plans in motion, by taking the time to explore any potential issues at the very outset, you will dramatically reduce your exposure to risks further down the line and help maximise the profitability of the site.

To help explain in a bit more detail, Partner and Head of our Commercial Property team, Victoria Walton, has joined forced with Graeme Blenkinsopp, Managing Director of Wisemove Land, to identify some of the key questions which all buyers should ask themselves when deciding if a parcel of land is right for them.

Victoria Walton

Partner and Head of the Commercial Property team

Graeme Blenkinsopp

Managing Director of Wisemove Land and Property Consultants Limited

Is this definitely the right location?

“Location, location, location,” applies to land as much as it does to properties. In development terms, it means keeping in mind the future marketability of your plots. Land in picturesque surroundings will not necessarily translate to best value plot sales; there are other factors to consider. Is the land in an area which is close to local amenities and benefits from good transport links? Is the land located within a growth area which has been earmarked for improved infrastructure soon and could result in considerable uplift to the development value of the site after you buy?

Whatever the size of the proposed development, you need to be confident that you will be able to sell the finished units at the best possible price. These are just some of the factors you must consider.

Are the boundaries clear?

It sounds obvious, but please make sure that you know the full extent of the land that you are buying. Just because there’s a fence or other established boundary in place does not necessarily mean that the seller owns all the land within that boundary and such features cannot be taken at face value. A survey of the land should be carried out sooner rather than later in order to identify any discrepancies between the title plans and the physical boundaries on the site and avoids any potential disputes at day 1.

What are the access arrangements?

When considering the boundaries of the site, careful attention should also be given to the current access arrangements and whether these will be sufficient for your future plans. Ideally, you should be looking for a site with direct access to the public highway and be wary of any site which is separated from the public highway by third party land (known as a “ransom strip”). Such parcels of land are often retained by the previous owner of the site as a means of restricting future development unless a “ransom” is paid, impacting on the profit margin.

If you intend to rely upon an existing right of way, you should pay close attention to the specific wording of the right as it may be that it’s only exercisable while the land is used for a particular purpose. Your solicitor will be able to discuss this with you, advising on whether the scope of the wording is strong enough legally to allow access to all eventual owners of the plots, or whether additional documentation will be required to permit this. In the case of any shared accessways, you should seek legal advice so you fully understand any maintenance obligations attached to the exercise of such rights so that these can be passed on to any future plot owners in the transfer documentation.

Are there any other obvious matters affecting the land

As well as flushing out any potential issues with the boundaries, a land survey will also help to identify any other potential barriers to development, from overhead power cables, trees which may be subject to a Tree Preservation Order, or the tell-tale signs of a trodden footpath (potential public right of way) running through the site.

Whilst many of these matters are unlikely to be deal breakers, they may cost more to put right than you’re willing to spend and it is better to be aware of these issues at the outset, to avoid any costly surprises down the line.

Does the site benefit from any existing planning permissions?

It will usually be obvious from the price tag whether a parcel of land is being sold with the benefit of planning permission. If it is, you will need to explore the detail of the permission (including the expiry date!) to ensure that it is suitable for your purposes. It is often the case that land will have the benefit of “outline” planning permission only, meaning that the final details of the scheme will need to be approved by the local planning authority at a later date.

If you choose to buy a piece of land that does not already have planning permission in place, you should take specialist advice to make sure that you are aware of the time and cost which will be involved in pursuing planning, as well as the possibility that this could be refused. It’s not uncommon for buyers to enter into a contract for the purchase of land without having planning permission in place, but your solicitor will strongly advise that specific provisions are incorporated to ensure that completion of the purchase is conditional upon the grant of a satisfactory planning permission.

When should I investigate title to the site?

As soon as possible! Often, the full title investigation will be carried out after you have agreed your Heads of Terms with the seller and solicitors have been instructed. However, there are benefits to asking your solicitor to look over the title documents even earlier than that so that any red flags can be raised at the soonest opportunity. Title issues to look out for include restrictive covenants preventing future development, third party rights and easements and historic overage provisions (requiring you to share a percentage of any uplift in a value with a previous owner of the site). It may well be possible to deal with these issues by way of indemnity insurance or by building in specific solutions within the contract documentation itself but, in some cases, a title issue will be serious enough to stop the development in its tracks. Far better to find out early and know what you’re dealing with.

In case you missed it Kate Garraway documentary highlights the importance of Lasting Powers of Attorney

Jennifer Purvis Associate Solicitor, Private Client team

An important part of my role as a Private Client solicitor is to help clients plan for their future and to support them in taking whatever steps may be necessary to safeguard their assets in the event of their death or incapacity. This often involves asking clients to imagine some very uncomfortable worst-case scenarios to ensure that, if the unthinkable was to happen, they are satisfied that their loved ones will be provided for in the way they intended.

Clients frequently come to me to discuss their requirements for a Will, keen to ensure that everything is taken care of in the event of their death, but will not have given any thought to what might happen in the event of their future incapacity. Some married couples, or those in a civil partnership, mistakenly believe that they would have an automatic right to manage their spouse or partner’s affairs should anything happen to prevent them from doing this themselves. Whilst this would certainly be true of assets held in joint names, it would not apply to individual bank accounts or credit arrangements etc.

In other cases, the client might be aware of the benefits of a Lasting Power of Attorney (LPA), but not wish to go to the additional expense of making these arrangements at a time when the risk of incapacity still seems so far away, assuming that incapacity is something that only affects the elderly.

However, for those of us who watched the broadcast of Kate Garraway’s candid documentary, Finding Derek, earlier this year will know, incapacity can strike at any age and with no warning at all. It can arise as a result of dementia, substance misuse, brain injuries following an accident or, in the case of Kate Garraway’s husband, Derek Draper, an ongoing battle with Covid-19.

Derek Draper was just 52 years old the day he was rushed to hospital in an ambulance and placed into an induced coma, for what he and his wife thought would be just 3 or 4 days. Twelve months later Derek found himself in what his wife described as “a state of limbo between life and death”, spending most of his time drifting in and out of consciousness and unable to communicate his wishes or intentions. It is an agonising situation which nobody ever wants to imagine could happen to them. What made the situation so much more devastating for the couple was that Kate had been unable to focus fully on Derek’s recovery or the emotional needs of herself and her children as, alongside the medical nightmare the couple were enduring, Kate also found herself in serious financial difficulty due to the fact that, for the entire time Derek was in hospital, she had been unable access his bank or credit card accounts, their joint savings, or refinance the mortgage. Had there been LPAs in place – something the couple had discussed previously but never got around to formalising – she would have had the legal authority to deal with all of this.

What makes this case uniquely complex is the state of medical limbo which Derek found himself in. Were it the case that Derek could be classified as having lost capacity, Kate would have had the option of applying for a Deputyship Order from the Court of Protection to obtain the legal authority to manage his affairs. However, because he occasionally had lucid intervals, this was not possible. A Deputyship Application is a ‘last port of call’ and certainly not to be treated as an alternative to an LPA. It is more complex and expensive than an LPA, and requires a great deal of work at a time when families are likely to be experiencing a lot of stress and trauma and already struggling with significant difficulties which an LPA would have resolved e.g. being unable to access a loved one’s bank account to pay for care fees

I often tell my clients to try and think of an LPA like an insurance policy – hopefully something to be put aside without ever needing to be acted upon, but which would be invaluable to our family and friends should the worst ever happen.

HOW TO...

...avoid court proceedings during divorce

Going to ourt for any reason can be incredibly stressful. When you add to that the emotional upheaval of navigating a marital breakdown, it’s no surprise that increasing numbers of separating couples are expressing a preference to “keep things civil.”

At Swinburne Maddison, our Family team are committed to helping couples reach agreement in a constructive and non-adversarial way wherever possible. We understand that a combative approach during the divorce process benefits nobody, particularly when children are involved and the importance of maintaining a good working relationship between the couple is paramount. Thanks to the specialist skills and qualifications within the team, our lawyers are able to work with their clients to explore all of the alternative dispute resolution (ADR) options that could help keep their divorce out of the courtroom.

The following methods of ADR all provide a quicker and more cost-effective result for separating couples, whilst also seeking to reduce hostility and encourage constructive communication to achieve the right outcome for everyone.

Mediation

Mediation is a voluntary process which aims to keep the decision-making in the hands of the couple. The mediator is impartial and will assist the couple to discuss difficult issues in a relaxed, informal way, removing much of the heat from the situation.

Any offers made during mediation are “without prejudice” meaning they cannot be relied upon by a judge if the talks breakdown and it becomes necessary to go to court after all.

Collaboration

Collaborative law is slightly more formal than mediation but shares the same aim; to help the parties reach an amicable solution to their disagreements.

With collaborative law, each party will appoint a specialist collaborative lawyer to guide them through the process and the collaborative discussions will take place in a series of 4-way meetings, attended by the couple and their respective lawyers. With all four participants present, there is less scope for misunderstandings and considerable progress can be made.

If the collaboration is successful, the lawyers will prepare a formal agreement which can be submitted for court approval, usually without the need for the couple to attend court.

Arbitration

Family arbitration is effectively private judging in that – unlike with mediation or collaboration – the decision will be made for the couple and that decision will be binding. This could be an attractive option for couples who do not feel able to reach an agreement through either of the other methods, but who wish to spare themselves the ordeal of going to court.

Family arbitration enables couples to resolve disputes much more quickly, and therefore more cost-effectively. It also offers full confidentiality and a less formal setting than a courtroom as well as providing the couple a degree of flexibility over how proceedings are run. For example, choosing the venue, agreeing whether to meet face-to-face or through writing only or deciding which parts of the case to refer to the arbitrator (there may be just one issue in the divorce which they are struggling to agree on, or they may wish to refer the whole case for arbitration).

Kath Hill Head of the Family team