10 points for real estate developers to consider when acquiring a site

In this 10 point checklist, Newmanor summarise the key issues you as a residential or commercial developers should consider when acquiring a site.

1. Any unilateral notices?

• Unilateral notices protect a third party’s interest in a site, such as an existing contract for the sale of part of the site or an overage

Solutions

• Obtain agreement to cancel the notice
• Apply to remove the notice with evidence that the protected interest has ended
• Establish that there is no entitlement to the notice or that the interest does not exist
• Overreach the notice

2. Any restrictions?

• A restriction can prevent the registration of your purchase or legal charge in favour of your lender
• Restrictions on title are often for the existing security granted by the seller

Solutions

• Obtain agreement to the removal of the restriction
• Comply with the restriction. For example, apply for consent to your purchase or legal charge
• Apply to the Land Registry to cancel the restriction

3. Any existing security?

• The seller may have granted a legal mortgage to its lender or a charge to another third party

Solutions

• Obtain confirmation the existing security will be removed at completion
• Obtain a solicitor’s undertaking to deal with the release of the seller’s existing legal mortgage

4. Any restrictive covenants?

• These arise when a landowner promises not to carry out certain acts on their land
• For example, there may be a restriction prohibiting the development of more than one dwelling

Solutions

• Comply with the covenant
• Establish that the restriction is unenforceable
• Obtain indemnity insurance
• Negotiate a release of the restrictive covenant
• Apply to the Upper Tribunal (Lands Chamber) to remove the covenant but this is a costly, time consuming and uncertain process

5. Any rights which burden the site?

• These are rights that other persons have over the site
• For example, an adjoining land owner may have a right of way over the site

Solutions

• Ensure the development does not restrict the right
• Negotiate a release of the right
• Obtain indemnity insurance

6. Any existing tenancies?

• There may be existing leases on site
• Usually, a developer wants vacant possession (meaning the seller and all occupiers have vacated the property)

Solutions

• Agree for any break clauses to be exercised
• Enter into agreements to surrender
• Include a vacant possession clause in the purchase contract

7. Any unregistered land?

• There may be land within the site that is unregistered
• Any lender would typically require regularisation of the position

Solutions

• Obtain a search of the index map
• Obtain a statutory declaration from the seller and any previous owners
• Make an adverse possession claim
• Obtain indemnity insurance

8. Can the site be accessed from the highway?

• The developer may need to pass over third party land to access the site

Solutions

• Obtain a highways search result to establish the boundaries of the highway
• Establish any existing rights of way over third party land that will enable sufficient access to the site
• Negotiate new rights with the third party
• Obtain indemnity insurance

9. What services are on site?

• There may be no mains drainage, water, electricity and gas
• There may be a private drainage system on site

Solutions

• Obtain a utilities search result to establish the position of existing services in the area
• Establish any existing rights to connect into services
• Liaise with the utility providers early on in the process
• Obtain an assessment of the private drainage system
• Obtain a build over or diversion agreement

10. Is an electricity substation required?

• Depending on the proposed development, the existing electricity supply may be insufficient
• Substations allow the voltage of electricity to be transformed

Solutions

• Negotiate a lease of an electricity substation with a network provider

Here at Newmanor Law we offer a bold new style of legal and business advice for developers in the commercial property and commercial property finance world on pre-contract negotiations, acquisitions, developments, construction matters and finance.

If you are a developer and you want to work with lawyers who take ownership of transactions and push deals forward quickly, please contact:

• James Dakin on +44 (0)7733 264 800 or email james.dakin@newmanor.com
• Alex Pelopidas on +44 (0)7795 567 095 or email alex.pelopidas@newmanor.com
• Karen Mason on +44 (0)7899 301 919 or email karen.mason@newmanor.com