10-points-for-real-estate-developers

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

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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 developer 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 real estate and real estate 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