Land Development - Land Acquisition

The successful conclusion of a deal to acquire development land is usually achieved after negotiations to attain a fair balance between the interests of the parties.  Buyers and sellers both have legitimate concerns, but the deal ultimately reached must both give the developer an incentive to perform and reasonably protect the seller’s interests.

Sales dependent upon the outcome of a successful planning application create particular difficulties.  It is easy for parties to agree that the sale will take place “when a satisfactory planning permission has been obtained” but very difficult to define when this has been achieved.  The whole permission needs to be considered, and the terms of any agreement under Section 106 of the Town & Country Planning Act 1990 required by the local planning authority and all relevant circumstances.  An option is still often better to use for both parties.  Sellers’ concerns to protect their position if the option is not exercised can be addressed by a number of safeguards to ensure that they are in a position to benefit from any planning permission should the option lapse. 

Delayed payment and overage arrangements have become increasingly common, as they enable developers to enhance offers to buy land either by taking advantage of the delay in payment to increase the headline figure or giving the seller the opportunity of participating in any later enhanced planning permission or should the sales revenue from the scheme exceed the parties’ initial expectations.  Any protection for such further payment to the landowner needs to be balanced against the need for the developer to be able to raise finance on the security of the site and the need to be able to achieve sales of completed units.  We have many years’ experience in looking at structures and coming up with solutions which achieve a reasonable balance between the parties’ interests.

We will carry out legal due diligence, which will include a site inspection.  If problems do arise, we will look at the ways of addressing these at the outset if possible or recommending ways in which the impact can be mitigated.  We will prepare a report in plain English for you to consider when everything is ready to proceed, which will highlight any points which need to be borne in mind when taking the project forward.