Devil in the detail when developing property
When it comes to property development projects, there is a common myth perpetuated by the poorly prepared when delays slow the final disposal and that is, ‘lawyers hold up deals’ or ‘lawyers kill deals’.
When the development has taken years and the final completed edifice stands proudly above the skyline, or the marketing material is ready to attract the buyers, arms are thrown aloft when specialist real estate lawyers like me say, “hold on, I have a few questions”.
A recent deal was indeed delayed by me, but only because of my attention to detail. I prepared a 9-page document listing the missing documentation I needed to see on behalf of my client, the purchaser, of what was on first impression a superb development.
But the developer had committed a cardinal sin. Missing paperwork, missing permissions, missing or mislaid invoices, a search for emails outlining the various stages of planning consent, all of which could have been neatly filed away in the project folder, as the development progressed
Keep everything safe
When you come to sell your property, whether it’s a small development of flats in a rural market town or a 20-storey office block in the heart of London, if there’s detail missing, the sale will be delayed if the buyer has an experienced real estate lawyer, who wants to see everything.
If the development was given planning consent, subject to a list of conditions which must be met as the project proceeds, like the travel plan, the park benches required by your Section 106 agreement or the letters of consent from the local authority, keep everything. Everything.
However insignificant you may think it is, you have to have the letters and the emails that show you had permission to carry on; that you have the necessary signatures or stamps on your plans; that you met every condition of the consent.
In all the excitement of the purchase, the design and implementation of your plans, it’s easy to forget the small stuff and think only big picture. At the end when you step back and admire your handiwork, do not be surprised by the delay in the sale if you have not kept accurate records.
Do not be one of those developers who perpetuates the myth that it is the lawyers that are holding things up, when all you had to do was take note of this advice and keep everything. Everything.
It could cost you dear
And lack of foresight with your paperwork, permissions and communications could not only delay the sale and cause additional interest costs perhaps, but lead to a lower price or even no sale at all.
When there are more than a few properties that fit the bill for the buyer, which one do you think will get chosen first, the one with the issues over poor record-keeping or the one with the perfect project folder that details everything? Everything.
If cashflow is a problem and your lack of detail throughout the project leads to delays and questions from real estate lawyers like me, you may have to sell at a discount; and all for the sake of a folder that contains everything, from every stage of your project.
If you have a commercial property issue you would like to discuss with an experienced real estate lawyer, who specialises in the small details, please get in touch with Karen Mason, a partner here at Newmanor Law on +44 (0)20 7464 4081 or email email@example.com