It’s all in the planning, right?

There is often a big hype about the need to obtain planning permission for a planned development or project, so much so that many other pre-development considerations somehow seem far less important and sometimes are little thought about. Of course planning is important, but spending time and money investing in the planning process could be futile if you later find something else preventing you from proceeding with your plans. Similarly, a project sold with planning already obtained can contain as many pitfalls for the unwary.

Restrictive Covenants, Easements and Rights

A new project could be seriously hampered by restrictive covenants such as those restricting the property to a certain use or which prevents building. In addition, perhaps existing rights of access are insufficient or other the rights of nearby properties will restrict the project. Rights of light should be considered in urban areas where light to other buildings could be diminished or reduced by the new development. The solution to overcome such hurdles can be very expensive as an afterthought and can event prevent the project going ahead altogether.

Landlord’s Consent, Consent from Third Parties and Overage Agreements

Consent may also be required from a landlord, other third party or a lender and it is not necessarily the case that consent will be forthcoming, even if the plans are reasonable. In other cases, there could be a sum of money due to another person when the value of the property is enhanced, under what is often call an overage agreement. That payment can sometimes be immediately payable on the grant of planning. Any unforeseen payment can cause a dent in the profit margin or could cause financial difficulty before the project gets of the ground.

Due Diligence

You may be familiar with the terms ‘due diligence’ and ‘buyer beware’ often used by property lawyers. Essentially, if you fail to carry out proper due diligence (usually involving title investigation, searches and enquires) at the outset, then you need to be aware that you purchase a property subject to everything you ought to have investigated or been aware of, even if you decided not to! Further, anything that the agent or seller or someone else has told you should always be verified by your solicitor if you intend to rely on this information at a later date. Quite often property developers are looking to purchase, to develop and to sell on completed units. With this in mind we can make sure by carrying out due diligence, that we have the answers to the enquiries we expect the solicitors for buyers of the completed units to ask. In the case of secured finance, a lender will also expect a thorough investigation.

Looking at titles and other documentation can tell us a lot,however there is often no replacement for a physical inspection of a site. Unlike many lawyers, we are not chained to our desks and we are always happy to make site visits to planned developments and indeed we recommend that we do so as early as possible in the acquisition or, if you already own the site, as early as possible in the onward sale process.

If you already own the property a refresher of the information, and obtaining up to date information, is still a good idea. Of course, there are times when you weigh up the risk and the deal is worth doing without the ideal information available, however often in spite of a very short timescale, information can be sourced quickly from the Land Registry and other sources to bring down the risk element.

If anything is certain it is that proceeding with a property purchase with a sole or primary focus on planning permission (or permitted development), or the great deal to be had, can be an expensive mistake. We would always recommend undertaking a proper review of legal rights and restrictions which might impact on your intended use for the land.

How Can We Help?

At Bartons we benefit from a great deal of experience acting for property developers, particularly on small or medium sized bespoke projects. We act for property developers both in the South Hams, Devon, Bristol and across the UK.

If you wish to discuss a property acquisition, property development or property finance matter please contact our property specialist Roseanna McNally for advice by email or telephone 01548 845007