For developers, their objective is to turn their vision into reality with as few issues as possible and without compromising their planned timescale or profit margin. In contrast, homeowners are generally opposed to any kind of development near their property and in some cases feel so strongly that they are able to organise themselves into an action group and raise funds with the aim of stopping the development from proceeding. In other cases the ‘developer’ may simply be a neighbour building an extension, affecting only one neighbour. Issues can also arise between joint venture partners in relation to option agreements, conditional sale contracts and other joint venture arrangements, particularly if things do not go to plan or one party changes their mind about proceedings, perhaps due to a change in land values. We are experienced in dealing with a wide range of development issues on behalf of developers, investors and homeowners, arising from everything from extensions to large housing developments.
Restrictive covenants restrict the use of land and once created, will continue to affect the land even after it is sold. A common example is a covenant prohibiting or restricting development. Breaching a restrictive covenant can have serious consequences. The owner of the land with the benefit of the covenant may be able to obtain an injunction to stop a development proceeding and even to have buildings pulled down. It may even be possible to obtain an ‘interim’ injunction forcing building work to stop whilst the court looks into the case. Even if the applicant cannot obtain an injunction, he may be entitled to substantial damages. We advise both developers and those opposed to development on the enforceability and scope of restrictive covenants and the remedies available. We have extensive experience of both obtaining and opposing injunctions and work with expert surveyors to advise on the value of any potential damages award.
A ransom strip is a small but important parcel or strip of land that is key to unlocking a potential development site, but is owned by someone other than the developer or its joint venture partners. It may, for example, cross the only viable access to a site. Sometimes a ransom strip is created quite by accident, but often its creation is intentional and designed to produce a ‘pay out’ if the site is developed in future. Substantial sums of money can change hands between developers and ransom strip owners, particularly on large sites. We are experienced in challenging the integrity of ransom strips to improve a developer’s negotiating position and advise on both strategy and value in ransom strip negotiations. We can either lead negotiations, work alongside your current professional team or advise you behind the scenes. Advice from one of our lawyers recently led to a developer negotiating a +£1m reduction in a ransom strip payment.
Right to Light
Rights to light are well known by city centre developers, particularly in London, but are still an unfamiliar concept to many property owners. A right to light is a right to a certain amount of natural light through a window or other opening in a property. These rights can be created expressly by deed (and noted on property titles) or they can be acquired over time. Where these rights exist, their infringement tends to arise where a high rise property is constructed next to a low-level property casting a shadow over the low-level property. However, the construction of a low-level property very close to an existing property can have the same effect. The owner of the land with the benefit of the right to light may be able to obtain an injunction to stop a development proceeding in its current form and even to have buildings (or parts of buildings) pulled down. It may even be possible to obtain an ‘interim’ injunction forcing building work to stop whilst the court looks into the case. Even if the applicant cannot obtain an injunction, he may be entitled to substantial damages. We have extensive experience of both obtaining and opposing injunctions and work with expert right to light surveyors to advise on the value of any potential damages award.
Village Green Registrations
Housing developments often take place on green sites such as fields. Sometimes these fields are an integral part of the local community and have been used for sports and recreational activities for many years. In appropriate cases these spaces can be registered as village greens giving them protected status and preventing them from being developed. Currently there are around 4,000 such spaces registered in England and Wales. Whilst these spaces could be registered at any time, in many cases this not even considered until someone applies for planning permission to develop the land. Our lawyers have experience of advising communities interested in acquiring village green status, preparing the registration application and dealing with legal challenges by developers to registration applications, including, where a local authority makes a bad decision, judicial review. Often developers throw significant resources at such challenges and communities who prepare their own applications frequently have their applications rejected on technical grounds.
Unlocking a potential development site can be challenging. Often parts of the site are occupied and the legal status of the occupants may be unclear. There may not even be any written documentation dealing with their occupation. This is particularly common with lower-grade industrial sites and former farm land. We work with developers and land owners to help identify the legal status of each occupier and both timescales and a strategy for obtaining vacant possession. It is essential to plan this well in advance.
Inevitably developing a site will, for a time, involve construction traffic, contractors on site, noise and perhaps dust and vibration. There may even be decontamination work required. As such there is at least the potential for nuisance being caused to nearby land owners and occupants. Nuisance is a common law cause of action that arises where something substantially interferes with someone’s enjoyment of their property. Given that those nearby will rarely be happy about any development, some complaints are inevitable. We can advise developers whether complaints amount to common law nuisance and defend any formal action taken. We can also advise property owners affected and if appropriate take steps to stop the continuance of nuisance, if necessary by obtaining an injunction.
Conditional Sale and Overage Agreements
Where house builders are interesting in developing a site, they are often only willing to proceed once they know they can obtain planning permission and any other potential problems, like access, are resolved. However at the same time they may wish to ‘lockdown’ the site to prevent it from being sold to someone else. In these circumstances a conditional sale agreement may be entered into, which provides for the sale to proceed at an agreed price, but not until planning permission and any other pre-conditions are resolved.
In other cases, the developer may wish to postpone the payment of the full purchase price until he knows how profitable the development will be. This can be achieved be entering into an overage agreement, under which, for example, the developer will pay a reduced purchase price, but will pay more if, for example, planning permission increases the value of the land beyond a certain threshold. The agreement may provide for an independent surveyor to determine the value and therefore the overage payable.
Disputes often arise where one party (usually the developer) seeks to withdraw from or renegotiate the sale agreement, perhaps because land prices have changed or because a better opportunity has arisen elsewhere. Overage agreements are often complex and disputes can arise over the calculation of any overage payments or indeed whether any overage is payable at all. One of our lawyers recently dealt with a case where the seller argued that overage in excess of £2m was payable and the developer argued that nothing was payable.
We can assist both land owner seller and developer in resolving disputes over all manner of conditional sale agreements, including overage disputes and have access to leading expert witnesses specialising in overage valuations.
A significant proportion of development agreements in the UK relate to a single property. A developer or builder may seek private equity investment (perhaps even from friends or family) and enter into a contract with them to buy a property, renovate it, sell it and share the profits. Often these arrangements are not properly documented or if they are documented, the documentation is not prepared by a lawyer. Where things do not go according to plan, the badly drafted contract makes it unclear how to proceed. We have experience acting for joint venture parties in resolving these issues.