A deposit paid to the seller's solicitor as agent, can be paid to the seller immediately following receipt. A deposit paid to the seller's solicitor as stakeholder must be held by that solicitor in his firm's client account until completion. From a buyer's point of view, it is usually best for the deposit to be paid on a stakeholder basis, as this will mean that should the buyer ever wish to recover the deposit, it is more likely to be available. If the deposit has been paid to the seller, then the seller is likely to have spent it!
There is no limit to how long a conditional period can be. It is however important that there is a long stop date on the contract, so that there is certainty as to the period within which the conditions must be fulfilled and so that the parties are not locked into a contract for an indefinite period.
No - a contact can be made conditional upon any number of items. Most commonly these will include the grant of planning permission, the placing on risk of defective title indemnity insurance, the receipt of satisfactory ground investigation reports and/or the securing of third party land.
It is important to ensure that the wording of any conditions is carefully drafted to ensure certainty as to when the condition is satisfied.
Stamp Duty Land Tax ("SDLT") is a tax on a transaction rather than on a document. Merely entering into the contract will not therefore trigger a liability to pay SDLT. Ordinarily, SDLT will only be payable when legal completion takes place. There can however be exceptions to this, where the circumstances of a particular transaction mean the liability to pay SDLT is triggered earlier. Examples of this are where the buyer takes occupation of the site before legal completion or where some of the purchase price is paid in advance of legal completion. Your lawyer should be able to advise on the circumstances of each particular case.
You may well be aware of this from local knowledge or from signage displayed on this site. Common land/ town or village greens are areas which are or have been used by members of the public for sports or pastimes. It is possible to carry out a search of the registers held by the appropriate local authority to check the position.
There is a prohibition on development of land that is registered as common land and/or a town/village green - the land cannot be used for access purposes or for substantive development.
There are no set procedures for dealing with such applications. It is for the local authority concerned to decide upon the best procedures in each case. Applications for registration of a village green can drag on for months or even years - it can often take six months for the authority to decide the appropriate forum for dealing with such an application.
First, make all relevant enquiries and do everything possible to establish in advance the chances of an application being successful, if it were made. Some cases are more straightforward than others. If you were buying the site of a factory that had been surrounded by a wall and to which the public has had no means of access for 50 years, you can safely say that an application would not succeed. An application would depend upon members of the public having had access to the land to use it for sports and pastimes for a period of at least 20 years. Contrast the factory example with the purchase of open land, perhaps a school playing field, where public access is a much more realistic likelihood.
If having made enquiries, you still think there is a risk, there are a number of ways in which you can protect your company. This can be by way of a condition in a contract, but more would then need to be done to flush out any such claims. One example is to fence off the land, so as to make access physically impossible. Another way of dealing with such issues is through insurance.
The need for transparency is key when dealing with plot sales transactions. This is because as a party to the sale transaction, you could be guilty of fraud if there is any attempt to mislead another (eg a mortgagee) as to the true circumstances of a transaction. Always be alert to unusual or suspicious circumstances in a transaction and if in doubt, seek advice from your lawyer as to the best way to proceed.
To download a copy of our Guidance Notes on discounts, incentives and similar click here.
There is nothing inherently wrong with introducer fees, as long as these are a genuine payment to the introducer. The problem arises when all or part of the "introduction fee" is being passed to the buyer. The need for transparency is paramount and there are procedures which should be followed to check out the circumstances of how the introduction fee is being dealt with.
To download a copy of our Guidance Notes on discounts, incentives and similar click here.
A Section 38 agreement relates to the adoption of roads. It is typically made between the highway authority, developer and (if different) landowner, pursuant to the authority's statutory powers in Section 38 of the Highways Act 1980. Typically, under such an agreement:
the developer will agree to construct a new road;
the landowner will agree to dedicate it as public highway;
the highway authority will agree to adopt it (so that it is then maintainable as a highway at the public expense).
Often, the NHBC (or some other such body) will be a party also, to guarantee the performance of the developer (so that the highway authority is not left with a half-built road and angry residents!)
A Section 104 agreement relates to the adoption of sewers. It is typically made between the sewerage undertaker, developer and (if different) landowner, pursuant to the undertaker's statutory powers in Section 104 of the Water Industry Act 1981. Typically, under such an agreement:
the developer will agree to construct a new sewer;
the landowner will grant the appropriate rights;
the undertaker will agree to adopt it (so that it is then maintainable as a sewer at the public expense).
A lock-out agreement is the same as an exclusivity agreement. Its normal purpose is to give a prospective buyer the time to negotiate (up to the point of exchanging contracts), without fear that the owner will sell to someone else in the meantime.
Such agreements can provide some comfort, but their benefit can be over-stated. They do not actually prevent the owner from selling to someone else - the owner could just wait for the lock-out/exclusivity period to run out. Even if the owner did sell to someone else, it would be difficult to recover anything more than wasted expenses (rather than, for example, the loss of profit that the prospective buyer might have made). Such agreements can also take time and money to negotiate - some would say that that time is better spent in negotiating the main deal.
Under a normal option, the buyer has the right to buy the property within the relevant option period on defined terms. The seller does not have the right to force the buyer to do so.
Under a put and call option, the seller also has the right to force the buyer to buy the property (so that the option works both ways). A put and call option is therefore quite unusual - it is most commonly used for tax purposes (to tie the parties in, but to postpone until a new tax year the date on which the contract becomes effective).
If you have the benefit of a right of pre-emption, the owner would be required to offer the property to you (on specified terms) if he decides to sell it within the relevant period. It does not force the owner to sell, but simply prevents him from doing so without giving you a right of first refusal. If one developer sells part of a site to another, he may well insist upon a right of pre-emption, to buy that part back, if the second developer decides to sell it on.
Your lawyer will be able to get hold of copies of the title plans for the site. We would recommend that you also have a site survey carried out to plot the physical boundaries of the site. When available, the title plans should be compared with the survey plan. This should throw up any obvious areas of discrepancy so that these can then be addressed.
If there is to be a plan attached to your purchase contract, this should take account of any discrepancies revealed by the checking exercise.
With regard to registered titles, whilst the Land Registry guarantees ownership, it does not guarantee the precise position of boundaries. There is a formal procedure for fixing boundaries, but that is rarely used. It involves serving notices on adjoining land owners and, as necessary, holding a hearing so that the relevant parties can put forward their competing claims.
There are also some legal presumptions of law that can assist in certain cases. Where a boundary is formed by a hedge and a ditch, there is a presumption that both the hedge and the ditch belong to the owner of the land on which the hedge is planted.
With regard to the subsoil of roads and the bed of a watercourse, there is a presumption that the owners either side of the road or watercourse each own one half width.
They are however no more than assumptions. They do not apply in every case, but can be of help in investigating background circumstances.
Where title to the site is registered, the Land Registry can assist in checking your proposed layout boundaries against the title boundaries. We would normally seek Land Registry approval as part of the process of setting up an estate for plot sales. There is however no reason why this process cannot be gone through at an earlier stage.
A Section 106 Agreement is an agreement entered into by a landowner/ developer with a local planning authority containing planning obligations relating to a particular site. The agreement will be entered into in connection with a grant of planning permission and will generally contain those requirements which are not set out in the decision notice itself. Typically such agreements would cover such things as affordable housing, public open space, highway works or financial contributions to public facilities.
Typically, a local planning authority will resolve to grant planning permission subject to a Section 106 Agreement being entered into. The local planning authority will then delay the issue of the written decision notice until such time as the agreement is in place.
Recently however, a number of local planning authorities have adopted a policy of issuing the decision notice, subject to a condition requiring that a Section 106 Agreement be entered into before commencement of development.
Where you are looking to acquire a site only once an implementable planning permission is in place, It is important to ensure that any contract which you enter into is conditional upon you receiving a written decision notice and completing any required Section 106 Agreement.
Yes. The local planning authority will require this in order to ensure that any planning obligations contained in the agreement are binding on the land to which they relate.
It is possible to enter into planning obligations by way of a deed of undertaking given by a landowner in favour of a local planning authority. Depending upon the terms of the planning obligations, this method is not always appropriate. For example, because such an undertaking is unilateral, it is not possible to include in it any obligations on the part of the local planning authority.
Broadly, if your development will reduce the amount of light available to a window (or other opening) in a neighbouring building, there is an issue that will need to be addressed. Your lawyer/surveyor should be able to advise you whether that interference would infringe the neighbour's rights to light and what steps should be taken to deal with the situation.
Your lawyer will be able to advise you whether there are any express rights mentioned in the title deeds to the site. Rights can however arise other than by formal grant (eg through more than 20 years' continued use). It is therefore important to have regard to physical features on the ground - carry out a site inspection and check to see if there are any windows or other openings in adjoining properties which open onto the site.
A public right of way is one which is enjoyed by members of the public at large. It will often (though not always) be registered in the definitive map kept by the relevant local authority. There is a statutory process for the stopping up or diversion of such rights of way.
A private right of way is one which is enjoyed by an individual for the benefit of land owned by that individual. It is possible for more than one individual to have the right to use the same right of way. There is no statutory process by which such rights may be stopped up or diverted. This would have to be the subject of separate negotiations with the landowner who has the benefit of the rights.
It may not be possible to tell with certainty whether a site is subject to rights of way. There are however a number of checks which can be made, to seek to ascertain the position:
Your lawyer will be able to carry out a search of the definitive map and/or make other enquiries of the local authority to determine whether it has records of any rights of way
Your lawyer will be able to check the title deeds for the site to see whether these provide any information as to rights previously granted or reserved
Always carry out a site inspection to ascertain whether there is evidence of worn footpaths/ tracks and to check for any signs of people using the site
First, consider the extent to which such rights might affect your proposed development. Consider whether you can accommodate such rights by building around them.
If not, then you can apply for a closure or diversion order in respect of a public right of way.
If the right is a private right of way, you could consider negotiating with the person having the benefit of the right, to wee whether it can be released or varied by agreement. Alternatively, it may be possible to take our indemnity insurance to cover the risk of any person seeking to prevent or interfere with your development on the basis of infringement of a right of way.
That depends upon the procedure used and upon the circumstances of each particular case. There are two procedures available to someone wishing to apply for the closure of a public footpath. One involves an application to the Magistrates Court under the provisions of the Highways Act 1980. The other involves an application to the Local Planning Authority under the provisions of the Town & Country Planning Act 1990. Your lawyer should be able to advise on which procedure would be best, depending upon the circumstances of the particular case.
