Residential Development Projects: Important Issues For Developers

Q. Is it a problem if a developer needs rights over land retained by his seller or owned by a third party?

Yes, you are quite right, that can be a problem area.

Take a situation where the seller of a development site is retaining land over which rights to construct infrastructure are required.

With some limited exceptions (for example where a right to requisition may apply), the grant of rights in favour of the purchaser alone is insufficient to ensure provision and adoption (if required) of that infrastructure.

The reason for this is because the statutory authority will also require a direct grant of the necessary rights from the seller to that authority, so the transfer documents must address this.

Even if there is an obligation on the seller to grant those rights, it must be properly protected in law otherwise it will not bind a future owner of the retained land. This position applies equally to any infrastructure required over any third party land.

Q. Are there potential difficulties when highway land is required for the construction of buildings or other non-highway purposes?

Yes – if the extent of the highway is to be altered and part of the new development will be located on that land, then a stopping up order will be required.

The sub soil of the highway will still be owned by the original party unless it was transferred at the time of adoption to the Highways Authority.

The developer and his lawyer should therefore takes steps to verify ownership of the subsoil prior to purchase.

If the sub soil of the area to be stopped up is registered to a third party or unregistered and therefore of unknown ownership, a transfer of the interest or acceptable indemnity insurance will in most cases need to be considered.

Q. Would agreeing to a charge over title to protect overage affect plot sales?

Protection of a seller’s overage is required since the obligation is positive and will not bind any future owner of the site.

Care needs to be taken however to ensure that the mechanism agreed will not delay or prevent sales. A restriction on dealings and obligation to obtain a covenant from any future developer should be sufficient protection and this creates less complication for development and sales than a charge.

The wording of the restriction will be key to ensure that plot sales, disposal of affordable housing land, infrastructure transfers and the like can be undertaken without delay or objection.

For further information please contact IBB’s residential development solicitors on 01895 207803, or email us at housebuilders@ibblaw.co.uk. Alternatively please visit https://www.ibblaw.co.uk/service/residential-development.

For more information on related topics please visit the respective pages below:

Partnership and Collaboration AgreementsProperty Development FinanceSustainable DevelopmentSocial HousingNew homes and plot sales process

Video Resources:

Assets of Community ValueRights of Light and Permitted Development