A Site Bought Badly

The Green Form

“It’s got its green form!”

“Its what?”

“Its green form. Its planning permission. For 10 houses. I got it for a song!”

So began years of woe for the would-be developer on this site and many like it. He, like many before him, thought that the ‘green form’ was the only bit of paperwork needed to turn a vacant plot into a windfall development site.

And this attitude, this mistaken belief, is so much more common than you might think. I see it regularly, probably once a week, from both sides of the deal: from the landowner who only wants to pay for an outline planning application (“a map with a red line around it”) to offload a spare bit of garden; and from the wannabe developer or self-builder who’s going to “make a killing” by building cheap and selling high.

And sometimes Lady Luck smiles and the landowner and developer both make their money… but quite often the little devils hiding in the details gradually reveal unanticipated problems – and costs – which conspire and multiply to plunder all the profits and don’t stop until those profits turn into losses that are truly eye-watering.

So where can it all go wrong? Development is a risk-based industry, much like gambling and insurance, so it’s impossible to consider all the potential pitfalls when initially looking at a site, but let’s look at some of the most common issues.

?Access

You might have a map with a red line around it and an approval stamp, and it may well even show good visibility splays for vehicular access – but are you sure you own or have Right of Way over this area? Even if you do, are you sure the rights cover your proposals?

We’ve seen sites where an existing Right of Way was specifically limited to pedestrian access for a small cottage but the purchaser needed to use this access for pedestrians, vehicles and services for a new housing development. As you can imagine, the landowner controlling the Right of Way saw ￡-signs along every inch of it!

Even if you do have good ownership of the access, can it be physically worked? A plan showing an approved access road with a “maximum gradient of 8%” won’t look as impressive when your site Engineer is explaining that the current site topography is at a gradient of 40% and that to reduce this to the required 8% will necessitate a series of switchbacks taking up the space of half your house plots.

Services

We could talk here at length about various services such as electricity, telecoms, water, etc but in recent years the most common problems by far relate to the unglamorous subject of sewers.

Most of what’s to be said about sewers ?applies equally to the other services anyway – except that electricity and telecoms can run uphill, unlike waste water!

So how can ‘NI Water’ and their sewers network ruin your day? Well for a start, unless you’ve got space for a septic tank, storm attenuation and discharge fields, you’ll want to be sure that there are public sewers close enough to your site to connect to. “Sewers, plural?” you ask – yes, long gone are the days when connecting your storm and foul lines into the existing ‘combined’ main was a given.

You’ll also want to know that the existing mains, local pumping station, etc have capacity to service your new development – be ready for more disappointment and an entirely apathetic regulatory system. They may agree that an area needs more houses and that your design and layout are the pinnacle of perfection, but if a pipe is full it’s full – few of us would turn on the tap if our sink was already overflowing.

Be even more cautious in certain Council areas where planning committees will approve development subject to a condition that you agree sewer connections with NI Water prior to buildings being occupied – if you can’t secure this agreement then your planning certificate really could be worthless.

Even where you have mains sewers actually on site that have capacity to connect into you can still come unstuck. You won’t be able to build over or even near them so unless they’re conveniently located where your roads or gardens will be then you’ll want to be sitting down when you read your quotation for diverting them.

And if your luck is in and you’ve ticked all these boxes, don’t forget that you still have to physically connect to the existing mains – so, just as with roads access, you’ll need to be sure you don’t need to make your connection over ground that you don’t own. They aren’t called ‘ransom strips’ for nothing.

Artistic Licence

Here’s another common issue to check out if you’re buying a site with full planning permission. Those lovely “artist’s impressions” and small-scale elevations could be hiding more trouble. Designs put through the planning system are often mere general representations of how the buildings are to appear, at scales that are too small to reveal real detail.

On a recent project that one of our clients had bought with full planning permission, the approved house designs had the ridge height set as a planning condition, but on developing the design details it transpired that the layout didn’t allow sufficient head height for a shower in the 1st floor bathroom. Cue a panicked application to planners begging for a revision to the approval!

…and more

These are just a few of the questions any developer needs to be asking of his professional team before handing over money for land. Want a few more? Try thinking about Listed Buildings, Conservation Areas, archaeological potential, Tree Preservation Orders (TPOs), planning policies, Planning Appeal decisions, fire brigade access, geology, road bonds… the list goes on.

Due diligence

The good news is that if you have a good solicitor acting for you, then there’s already a robust conveyancing system in place to check all of these issues and more – just don’t be fooled into thinking that it’s an easy tick-box exercise that anyone can do. If it was then we wouldn’t see as many sites ‘bought badly’.

The best conveyancing solicitors will also know their own limitations and will often seek more expert advice where there’s any doubt. They might know that there is sewer capacity at the site, but do they know whether a pumping station will be needed to reach it? Most solicitors won’t visit your site either and it's uncommon for them to appoint a surveyor to check physical boundaries against conveyance maps (if your solicitor pushes a map across their desk and asks you “is this the land you’re buying?” then be very careful before you answer!).

The bidding cycle

One of the main decisions you need to make early on is whether to wait until the site is agreed to you before you commence with pre-contract enquiries: if you do, then you run the risk of finding problems late on in the process, perhaps missing better opportunities in the meantime; if you don’t then you can spend a lot of money finding issues that can price you out of the bidding.

From the other side of the deal, a vendor who has simply (and cheaply) secured Planning permission with appended pages of Conditions will often find themselves with encouraging bids? from potential purchasers who, one by one, drop out of the bidding as they start to explore the detail and cost of these conditions.

What happens to these sites then? If you start looking at the Planning history for any expired ‘building site’ to find out why it hasn’t been developed you’ll usually find a few clues between the Consultation responses and the Conditions. There are at least two within walking distance of our offices where we’ve recently been able to advise clients on costly access and archaeological conditions that make these sites liabilities rather than assets.

?Getting lucky or studying form

But of course development land does get approved by planners, sewer connections do get agreed, problems are overcome and houses do get built every day. But look who’s building them – as we saw above, development is a risk-based industry and, just as anyone can get lucky at the bookies occasionally, the smart gamblers (and the bookies themselves) are doing their homework, studying form, taking advice and pricing the risks.

So if you’re looking to progress from a tenner each way at Aintree to the heady heights of development, do yourself a big favour – appoint a professional team early on, listen to them, and be ready to pull the plug on any deal where the warning bells are ringing. I know a? lot of people who wish they’d cut their losses on ￡5,000 of due diligence rather than push on to own a garden with a ￡? million hole in it.

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This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our team at 9yards Property Ltd for further advice or information. Colin Logan, Director, 9yards Property Ltd.

Colin Logan BA(Hons) MSc FCIOB MIFireE is Director at 9yards architecture.

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