In the south-east of England, we are fortunate that there is also a high demand for homes in the current climate. The demand for homes means that large-scale developers continue to look to our area to see if there are opportunities for development, but we also see that the potential for small developments also remains strong. That said, if you`re lucky enough to have land that can be developed, you should consider what options are available to see if you can make extra money from your property. In this series of articles, we will discuss some of the most important forms of contracts in developments. With the growing demand for land to accommodate our growing population, a large number of landowners who were previously neglected as potential development sites are beginning to become more attractive to the demanding developer. Herrington Carmichael works for both landowners and developers who want to capitalize on the demand for new housing. For buyers and sellers, there are several legal options you can use to make sure you don`t lose, no matter where a planning request goes. We`ll look at some of these options here.c. Purchase contract subject to receipt of building permit A conditional contract is an alternative to the use of real estate option contracts. An option gives the option holder (usually the buyer) control over the situation and the transaction.
A conditional contract offers a safer situation because the owner knows that he has only sold on the condition that the condition is met. Section 106 agreements A section 106 agreement is a document used by boards to secure planning obligations, such as funding for schools, roads, infrastructure and other elements in the region. Often, a building permit is not issued until the conclusion of the agreement under Article 106. The obligations contained in these agreements are binding on the country and it is therefore important that they are reviewed and negotiated before the issuance of the building permit. Architect License It is common for the architect responsible for creating design documents to own the copyright to these drawings. It is therefore common for a developer to require the architect to grant him a license to use the plans. Before marketing the property for sale, it would be helpful to contact the architect and all professionals who have prepared reports for the building permit to determine if the buyer will write an authorized or trustworthy letter. An option usually gives the buyer the right to purchase the land if they notify the landowner for an agreed period of time (the option period), usually for a sum of money (the option fee).
If the notification is made by the buyer during the option period, the landowner must sell the property to the buyer under the terms of the option. The most common condition is the issuance of a building permit, but it can be something, such as.B. the possibility of finding adequate financing. You can easily modify the template for any other condition or multiple conditions. Since completion depends on planning, CSTPs largely focus on this planning process, and the only real difference between a normal “simple” contract and CSTPs is that a building permit must be obtained. This remains a risk for a developer as they agree to buy a property before planning takes place. Therefore, there is no guarantee as to the exact form of approval that will be obtained and, therefore, the CSTP include a system that allows a developer to indicate whether the building permit obtained is “satisfactory” for them. If the authorization obtained is not satisfactory, if the purchase is not completed or, as described below, a call may be required.
The contract usually specifies the reasons why a permit may be classified as “unsatisfactory” and may result from a permit that requires significant additional expenses for the developer, or that the need for a number of homes that will significantly affect the overall profitability of the development. Of course, if a seller wants to sell a piece of land, they will want to get the best price, but knowing what the best price is for a particular property can sometimes be difficult. This is especially true if a building permit is required but may not be obtained for some time, or if there is great uncertainty as to whether the development is likely to be granted. If obtaining the building permit is considered safe enough, the owner may be willing to conclude a contract for the sale of the land provided that it is concluded only if the building permit is granted. If the buyer is then unable to obtain the building permit, he is not obliged to finalize his purchase and can leave after losing only the legal costs of the contract and the costs associated with his construction application. Similarly, most of the other lawyers, Attwells Solicitors, are real estate law experts with an appraisal for planners, so we can meet all your development needs up to the sale of the properties. The use of a conditional contract should be preferred to an option agreement if both parties are able to weigh the likelihood that the condition will be met. A conditional sale, outside the condition, is “made and dusted”. Ownership of property Before the 1980s, most land in England and Wales was not registered, meaning people still had physical deeds/transfers that included the rights and obligations associated with a particular piece of land. When buying land that does not have a building permit, whether it is self-built or as a developer, your plans and the final value of the site will depend heavily on your ability to obtain the building permit.
It is therefore understandable to want to protect oneself from the possibility of refusing the building permit. If an unconditional contract is used, during the exchange, the buyer agrees to finalize the purchase of the land by the completion date specified in the contract. It does not depend on other factors and gives security to both parties. .