Any developer will have a team of experts on their side that will be on hand to scrutinise every aspect of a prospective land purchase. This means that even the smallest potential issue is likely to be picked up – and could cause a potential delay to the sale.
Here we look at some of the most common hurdles that arise when selling land for development – and how to avoid them getting in the way of a sale.
Title issues are not uncommon with large parcels of land. Although they can generally be resolved, any that are identified could deter developers and delay sales. Matters such as unregistered land, missing documents, restrictive covenants and boundary problems are all ones to watch out for. Dealing with these at an early stage can prevent them rearing their head down the line and potentially derailing the deal.
The cost to remedy any land that has been subject to contamination can be significant. Any developer will want to know the extent of this before they commit to a purchase so they can factor this cost into their calculations. It is worth bearing in mind that this may have an impact on the price a developer is willing to pay. It is best to be upfront about any environmental issues, having reports that may have been undertaken available. Similarly, if the land has any prior history of flooding, any surveys or reports should be offered up for inspection.
Rights of way
Land can sometimes be subject to old rights of way from years gone by when land was used for different purposes. Taking action to legally remove these rights can prevent stumbling blocks later on.
Agreements with tenants
It is not uncommon for landowners to have agreements with tenants to use their land. However informal an agreement may be, if it has been in place for a number of years, it could cause potential issues if the land is to be sold. The terms of any tenancy agreement may need to be reviewed and it could be that compensation is due in the vent that any tenancies need to be cut short due to the land sale.
Where your property/land is subject to a legal charge – ie. from a mortgage provider – you will need to consider the consequences if it is sold. Where land is being divided up, a release may need to be obtained. Again, this is easily overcome provided the right steps are taken. Taking early advice will prepare you for what needs to happen and allow enough time for the paperwork to be arranged and completed.
Taking proactive action to address any potential stumbling blocks is likely to stand you in good stead, preventing any delays and allowing you to achieve the optimum value for the land.
Lea Hough’s Land and Development team are well versed in many of the issues that commonly arise in relation to land. Where any legal involvement is required, we are able to work with your existing advisers, or recommend our own trusted contacts, to reduce the impact on the progress of the land sale. Please contact our team for more information.