What are the legal considerations you should be thinking about when buying a development site?
Buy in haste, repent at leisure. Provided you’ve got the money, buying a development site is easy. The tricky bit is making sure that you’re able to build what it is you want to build. Whether it be a single dwelling or an entire housing estate, the legal issues that need to be considered are similar.
This article takes a very high-level look at what one needs to check as part of the process of buying a development site. It provides something of a checklist to make you think about what must be looked at. Each individual item under each individual heading can be a minefield in its own right and so before you buy a development site – stop, look and listen!
- Title defects
Restrictive covenants – preventing building or restricting height, mass or position.
Third party rights over the land – rights of way or rights to install utilities.
Ransom strips – preventing access.
Boundary issues – discrepancies between title plans and planning drawings.
Restrictions on title – requiring payment of overage or similar.
- Planning issues
Is the consent outline or full?
Conditions – can they be complied with? Do they involve third party land?
Can the permission be challenged?
Community Infrastructure Levy – what is the charge and when does it need to be paid?
Biodiversity Net Gain – what are the obligations?
Section 106 Agreements – what needs to be done and what will it cost?
Expiry dates for planning permissions.
Implementation restrictions – what are the pre-commencement conditions?
- Access and services
Does the title abut the highway? If not, are there sufficient rights of access over third-party land?
Does any access way need to be improved in which case are there rights to do so?
Do third party access arrangements involve contributing to the cost of maintenance?
Can you get utilities in and drainage out?
Visibility splays / sight lines – can they be provided without using third party land?
Road, water and sewer connection and adoption agreements.
- Environmental matters
Is there a flood risk, whether from rivers, seas or surface water?
Contamination – has an environmental audit been undertaken?
Are there special features on site or in close proximity which could impact development?
Special Conservation Areas – does Suitable Alternative Natural Greenspace need to be provided?
Tree Preservation Orders.
- Professional reports and architect’s drawings
Who owns the copyright in architect’s drawings?
Which professional reports can be assigned or re-addressed?
- Rights of light, party walls and neighbour issues
In urban areas, will rights to light be infringed?
Will works be done to party structures (shared walls or fences)?
Will foundations impact party structures?
Neighbour objections or nuisance neighbours?
- Tax
Stamp Duty Land Tax on acquisition and opportunities for reliefs.
VAT issues – particularly with conversions to residential and recovery of VAT on professional fees.
Capital gains where sites are being acquired through corporate vehicles.
