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The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

Property Development: Due Diligence

Paul Higgs comments on some of the key points when buying land for development

Whether buying land or buildings with development potential, with or without planning permission in place, here are some of the top 20 things you should look out for.

1. Ownership. Although it may seem obvious, the first thing you need to check as soon as you even start negotiating a purchase is who actually owns the site. For some reason when it comes to purchasing development property (probably because of the potentially large sums involved), it's not uncommon for people to attempt to put themselves in the middle of a deal and try to sell things that they don't actually own!

You need to make sure you are negotiating with the right person.

2. Boundaries. When purchasing a site or applying for planning permission you must make sure that the legal boundaries tie-up exactly with what actually exists on the ground. If they don't your planning permission may be invalid or impossible
to implement.

Always get a full topographic or measured-building (in the case of conversions) survey before exchange.

3. Planning Permission (Applications). When applying for planning permission the applicant must draw a red line around the application site and serve a legal notice on all beneficial owners. If any notices have not been served or the red line has not been drawn in the correct place then the planning permission will be invalid.

Check that all notices have been properly served and that the red line has been drawn in the right place.

4. Copyright and licences. Although you may be purchasing a site with planning permission that does not mean you automatically have a right to use the drawings and disputes sometimes arise (particularly where architects or other consultants have not been paid).
Make sure you have a signed licence agreement (particularly from the architect) giving their permission for you to use
any drawings.

5. Warranties and licences. As above, if you need to rely upon any reports or surveys (and particularly topographic surveys or soil reports) then you must get a direct licence and warranty from the original provider.

Get warranties allowing you to rely upon any professional surveys or reports.

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