Site Acquisition: What to consider

Any developer looking to acquire a specific site upon which to develop properties should take expert legal advice from the earliest possible moment to ensure the transaction runs as smoothly as possible. 

Matters that will need immediate attention are any planning permissions required or currently in place, environmental investigations, and the commercial aspects of the prospective deal. Though there are many other factors which need to be taken into consideration if the development is to run smoothy and deliver the maximum possible return for developers.

Searches

In the simplest terms, any decision to acquire a site should only be taken after the following legal searches have taken place:

• A search to establish the legal title to the site in question and investigate whether any restrictions, boundary issues, or covenants (including overage provisions) exist and are likely to impact any proposed development
• A search to establish the access routes to the site, highlighting any that a developer would not automatically have the right to use or any which are not directly connected to the public highway
• A search to establish what planning obligations or agreements may already be in place concerning the site

Having identified any issues connected to the site, the legal experts should then be in a position to advise as to the possible use of solutions such as deeds of easement, deeds of variation, and deeds of release.

One issue which is easy to overlook is the presence or otherwise of basic utilities such as water, sewerage, drainage and telecommunications. All too often developers, perhaps blinded by the appeal of a site in other respects, proceed under the assumption that utilities of this kind will either be in place already or if not, can easily be diverted onto the site. This is not always the case. Investigations need to be carried out prior to acquiring a site to ascertain whether any existing utilities are sufficient for the planned development, whether access rights will hinder the usage of said utilities and whether that in itself will inhibit the potential to develop the site as proposed.

Considerations

Although searches for this kind of project are highly detailed in nature, they form just one part of a wider approach which should be taken when acquiring a site. The process can be broken down into roughly four separate areas of analysis and appraisal:

1. Engineering challenges the site might present
2. Planning considerations which might come with the site, such as issues with purchasing a greenfield site
3. The financial implications of purchasing the site – balancing likely cost with expected return
4. Topography of the site

A fairly straightforward analysis of the terrain should be enough to ascertain any initial challenges it could present in terms of development. A relatively flat area is usually going to be easier to develop than a steeply sloping area, for example – having said that, hill villages across the world stand as testament to the fact that a steep slope doesn’t need to prevent development altogether!

Indeed, a slope of some kind may prove to be advantageous in terms of the drainage of the land. A site which offers a degree of natural drainage is always going to be easier, quicker and less expensive to develop than one which requires the addition of drainage solutions.

There’s only so much that can ever be learned regarding the drainage and similar features of a site via a simple inspection. Even an expert analysis needs to be combined with local-based research into the history of the site to truly discover how it is likely to cope with issues such as periods of more extreme weather.

Another important factor to consider is the degree of accessibility offered by the site. If the site is intended to be developed for industrial or commercial use, for example, then it is vital that it offers ease of access to road and possibly rail links to enable any future employees – as well as goods, manufactured items and raw materials – to travel to and from the site easily.

In the case of a residential development, the proximity to public and private transport links can add to the value. Its vicinity to facilities such as shops and schools could make the difference between a residential development being genuinely viable or not.

An analysis of the available access should be made on the basis of the demand that is likely to be placed on access and egress routes around the site at peak travel hours.

The purpose of the development and the works that will need to be undertaken are also important considerations when assessing site accessibility. For example, a construction team working on a development would likely have needs for vehicles of different weights, types, and manoeuvrability which would need to be planned for effectively.

Finally, when reviewing a prospective development site, it is essential to take into account the legal nuances. Owning a freehold interest in the site is ideal for developers. However, if only a leasehold option is available then due diligence must be done to ensure that it’s lengthy enough to provide ample opportunity for future development. Additionally, purchasers need to look into any encumbrances on the site – such as restrictive covenants or access rights through adjoining land – which could limit their ability and the scope of the project.

Should you be looking to acquire a site but have concerns or questions as to its viability for development, or about the acquisition process itself, then the experienced commercial property lawyers at Newmanor Law are ideally positioned to offer guidance. Contact us now for an impartial consultation.