Selecting the right site for your development is an exciting but sometimes complex process. While it’s tempting to dive straight into planning your vision, failing to consider key issues early on can lead to costly delays, lost profitability, or even the derailment of your project. Parmjit Gill explores some of the most critical factors to consider when assessing a development site and why early legal advice can help you avoid these risks, so you can move forward confidently.
Public and Private Rights: What’s the Impact on Your Site?
Public Rights of Way
When visiting a site, pay close attention to its boundaries. Is there a gate, an opening, or a well-trodden path suggesting regular public use? These could indicate a public right of way, particularly if walkers or dog owners commonly use the area. Signs, even if partially obscured by overgrown vegetation, may also provide clues.
Public rights of way don’t automatically make a site unsuitable. Depending on their location, you might be able to design a scheme that accommodates them.
Example: If the right of way runs along the boundary, you could incorporate it into the site’s layout while maintaining the financial viability of the project. However, if it runs through the middle, this could reduce the number of usable plots, negatively affecting profitability.
Private rights
Private rights can be harder to spot. Look for signs that someone may be maintaining or using parts of the site—perhaps a small patch of land that is being kept tidy or appears to be in regular use. This might be the result of informal agreements between the seller and a third party. If these arrangements have gone on for long periods, the third party may argue they’ve acquired legal rights.
Example: Grazing licences are common in rural areas. While beneficial for landowners as a source of income, these agreements can complicate matters for developers by affecting vacant possession and creating potential planning issues. Fertilisers used for grazing could also raise red flags in ecological reports, which are often required as part of planning applications.
Buildings and boundaries: What’s hiding on your potential site?
Existing structures, whether tenanted or vacant, listed or unlisted, require careful scrutiny. What are they currently used for, and will their presence affect your development plans? If any buildings are listed, you’ll need to factor in the additional costs and restrictions associated with altering or demolishing them.
You should also pay attention to the site’s boundaries. Are there old or new walls, and who owns them? If a wall is shared with a neighbour (a party wall), you’ll need to appoint a party wall surveyor and follow legal processes, which can be both time-consuming and expensive. Early investigation of boundary issues can help avoid costly disputes later.
Access and highways: Will your site work logistically?
One of the most critical aspects of your development is how vehicles and equipment will access the site. Will access be from an adopted highway, a private road, or a combination of both? Are there any gaps or grass verges between your site and the public highway, and, if so, do they belong to a third party? These gaps, known as ransom strips, can complicate access and may require additional negotiations and costs to resolve.
Highway searches are essential to confirm that the site boundary connects to an adopted highway. It’s also important to look for any nearby traffic restrictions, such as weight limits, that could affect your ability to bring in construction vehicles and equipment.
City-centre developments: Added complexities
Developments in urban areas come with unique challenges, such as rights of light, oversailing licences, and telephone masts.
Rights of light issues arise when your development affects the amount of natural light reaching nearby properties. A sunlight and daylight report, or a more detailed rights of light report, can quantify the impact and help you manage potential objections. Ignoring this could result in an injunction during construction, bringing your project to a costly standstill.
Crane oversail licences may also be required if your construction crane’s jib swings over neighbouring land. Obtaining these licences involves providing detailed drawings and engaging with third parties, which can be time-consuming and require careful planning.
Finally, if there are telephone masts on site, be aware that removing or relocating them is notoriously challenging due to their protection under the Telecoms Code.
Red flags
Ransom Strips
A ransom strip is a small piece of land that can block access to a larger parcel of land. Imagine you've found a promising site, but to access it, you need to cross a strip of land owned by a third party. This third party, knowing the strategic importance of their land, may demand a significant payment to grant access.
How to Deal with Ransom Strips:
- Confirm Ownership: Verify if the ransom strip exists and who owns it. This can be tricky, especially with unregistered land. If the land is unregistered, it may require a more in-depth investigation to confirm ownership.
- Negotiate Early: If the strip is owned by someone else, negotiate terms before purchasing the site. It's crucial to determine if the owner is willing to sell or grant rights over the land and at what price. This negotiation should happen as early as possible to avoid complications post-completion.
- Consider Alternatives: Explore options like applying to the Land Registry for ownership or taking out insurance against potential claims. For instance, if the hedge on the ransom strip was planted by your seller 15 years ago and has been treated as their own, you might have grounds to claim ownership. Insurance can also be a useful tool to manage risks, providing comfort to you, your funder, and potential buyers.
Access Issues
Access to the site is another critical factor. Even if a site looks perfect, access issues can derail your plans. For instance, an unadopted road might seem like a viable access route, but if the right of way is limited to certain uses, it could pose a problem.
How to Address Access Issues:
- Review Deeds: Examine the deed that grants the right of way to ensure it covers the intended use. Not all rights of way are granted equally; some may be limited to residential use only, which could restrict larger developments.
- Implied Rights: Investigate if a broader right of way can be implied based on historical use. If the seller has been using the roadway for a wider range of purposes, it might be possible to establish an implied right.
- Formalise New Rights: If necessary, negotiate and formalize a new right of way with the landowner. This can provide the certainty needed to proceed with development plans.
Restrictive Covenants
Restrictive covenants are agreements that limit how land can be used. These can be particularly troublesome if they prevent development or commercial use. For example, a covenant from the 1930s might restrict building more than one house on the land.
Managing Restrictive Covenants:
- Examine the Covenant: Determine if the covenant is still valid and who can enforce it. Check if the covenant binds future landowners or just the original parties.
- Seek Discharge: Apply for the discharge of the covenant if it is obsolete. The landscape and context in which the covenant was created may have changed significantly, making the restriction outdated.
- Negotiate Release: If the covenant is enforceable, negotiate an express release with the beneficiary. This can be a commercial agreement to buy off the covenant, providing certainty for development.
- Insurance: As with ransom strips and access issues, insurance can be a useful tool to manage the risk associated with restrictive covenants. Discuss this option with your solicitor early in the transaction.
Finding the perfect development site is rarely straightforward. The key is not necessarily to find land with no risks but to identify and manage those risks effectively. By addressing potential red flags such as ransom strips, access issues, and restrictive covenants early in the process, developers can navigate around these obstacles and mitigate risks to ensure a smoother development journey. Always consult with your solicitor early in the transaction to explore your options and safeguard your investment.
While the points above highlight some of the challenges you might face, they also emphasise the importance of involving a legal expert early in the process. From uncovering hidden rights to managing potential risks, having the right legal team by your side can save you time, money, and stress.
By instructing a lawyer at the outset, you can:
- Identify and mitigate risks before contracts are signed.
- Avoid delays caused by unforeseen legal issues.
- Protect your profitability and ensure your project’s viability.
Our commercial property team work with commercial property developers on residential, industrial, commercial and retail developments. Whether you’re assessing your first site or managing a portfolio of developments, we provide practical, cost-effective advice tailored to your needs. Get in touch today to learn how we can help.
