There are various legal issues that surround the acquisition of a site for development purposes so it is important legal advice is sought to ensure the transaction runs smoothly. Apart from the usual considerations such as planning permission, highway agreements, environmental investigations, and the commercial terms of the deal, there are numerous other factors that can affect whether a site can be developed on time and within budget, ensuring investors receive the maximum return on their investment. In this article, what is site acquisition, we take a look at the process involved.
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Things to consider in the site acquisition process
As the demand for new housing is far outstripping supply there has been an increased competition for developers seeking excellent building locations. Along with these developments, there are several critical components and phases that can aid you in constructing the best single or multiple dwelling site. Among those steps, the site selection stage is critical, and one to which you should pay special attention. Selecting and investing in property is not easy, even more so for people with limited skills in site analysis or surveying.
As a result, you should consider the following factors and incorporate them into your land development and site acquisition processes. Additionally, while determining if a project is worth the risk of investment, there are three primary avenues of investigation:
- Potential engineering issues with the site.
- Potential concerns with planning e.g. the implications of buying a greenfield site.
- Financial considerations.
Topography
The suitability of land for various development initiatives is largely determined by its terrain. For instance, assuming all other variables remain constant, flat or gently sloping ground is more likely to be suitable for development than steeply sloped terrain. This is not to say, however, that the latter cannot be developed. Numerous locations contain extensive swathes of steeply sloping land that have seen major development.
The slope of the ground is referred to as its inclination. While flat sites make construction easier, they are not necessarily the best. While developing on a mild slope, you may be able to benefit from an improved water drainage system. Prior to beginning development, you may need to level any slopes that are present and be mindful of the effect on the open market value of the land. If the property lacks a natural drainage system, the developer may be required to use costly design and construction, as well as possibly advanced land drainage solutions, both of which add to the cost.
Due to the fact that improper drainage features are not always evident to the untrained eye, a thorough site inspection should be complemented by extensive local research.
Connecting Utilities
One of the more frustrating aspects of property development is the connection of utilities. Gas, electricity, water, phone lines, sewage, Sky TV and broadband are necessary requirements for most homes. If the site is lacking some or all of these utilities, the developer will be faced with the challenge of providing a supply to each unit being built on the site. Additionally, meters will have to be provided for each unit.
You will largely be at the mercy of the utility providers although there are companies that will act as a go between and offer to help you move up the queue regarding connection. The key is to be mindful of this and the impact it will have on your proposed development in terms of costs and the impact it will have on build schedules.
Risk Of Flooding
At the time of writing, the UK has just endured three major storms with reports of flooding throughout the country. In theory, every building site is at risk flooding but certain locations are more at risk than others. It is prudent to invest in low-risk sites. This is because insurance premiums might be reduced as a result of the reduced risk of flooding.
Access to the site
Accessibility is crucial for your development site. Access to main roads, railways, access roads, and other lines of communication will increase a property’s development potential. These factors are critical for developing industrial, retail, and commercial space. It is vital to address the transportation of workers to and from industrial sites, as well as the delivery of finished items and raw materials. Residential properties that are conveniently accessible via private and public transport will increase in value. Access to shops must be straightforward, whether by car or public transportation.
Any development must have sufficient approach roads and an appropriate site entrance to accommodate the anticipated traffic. Access roads designed for domestic use may not be suitable for industrial use. It is critical to remember that construction traffic is usually heavier than end-user traffic. If access is insufficient for construction traffic, development expenses are likely to be increased. Appropriate access is key to a successful development. Access to the site should be adequate to meet peak traffic, pedestrians, and routine workloads.
Location, location, location
It is crucial to examine the location of a potential development site when determining whether or not it is suitable for a certain type of development. A completed development project’s value is determined by its location. Different types of development require different characteristics. It is critical to ascertain the worth of an area in order to meet specific requirements. If developments are more user-friendly, they will have a larger chance of profitability.
Check for nearby factories or anything else that is a source of smell, noise or is considered an eye-sore. These factors may make your property less desirable to live in and more difficult to sell. Research the crime rate in your neighbourhood. Have faith in your instincts. If you have a sense that something is wrong, you should take notice of it. Additionally, you can visit a police station or go online to obtain precise information about crime statistics in specific neighbourhoods. This is crucial since even the best neighbourhoods might have a high crime rate.
What is the tenure of the site and are there any other legal considerations
When determining whether a piece of land is suitable for development, it is necessary to consider the legal interest in the site. Developers will often prefer circumstances in which they may acquire the freehold interest in land and that such interests are free of encumbrances.
Developers will often want a long leasehold stake if only a leasehold interest is available. A lease should be lengthy enough to ensure that the developer receives the full benefit of later development activity on the site. Whether a developer purchases a leasehold or freehold interest in land for development, he must ensure that there are no encumbrances that make it difficult to create a reasonable project or result in low financial returns.
How we can help
We have a proven track-record of helping clients acquire potential development sites. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Commercial Property Solicitors
It is important for you to be well informed about the issues and possible implications of buying a site. However, expert legal support is crucial in terms of ensuring a positive outcome to your purchase.
To speak to a member of our New Enquiries Team today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
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