Discussion
My parents bought some land years ago. It's 1.7 acres of mainly scrub, grass and woodland, on a country lane in a quiet area designated green-belt. They've not used it for years, are worried that trees might fall and squash people, and the chances of it ever being granted building permission are miniscule. They're now pondering selling as someone has just approached them with a view to purchase as somewhere to keep her animals. Just so I'm more aware of what they should be doing (!) can anyone tell me what they should be doing?! I think my plan would be to get an agent to value it (is that as easy as an estate agent valueing a house?) and then ask the interested party how much she thinks it's worth. Is there anything else not so obvious that they should be doing? Can anyone recommend such an agent/valuer in Hertfordshire?
One idea they had is to sell it with a clause in the contract allowing them to buy back half of it at cost price should building permission ever be allowed. Such a contract would need lots of long words in it of course, but is this sort of thing possible? It would seemingly benefit both parties.
One idea they had is to sell it with a clause in the contract allowing them to buy back half of it at cost price should building permission ever be allowed. Such a contract would need lots of long words in it of course, but is this sort of thing possible? It would seemingly benefit both parties.
Some sort of contract and/or change of ownership I would guess... I think a Solicitor can sort this out for you, although others may also be able to do this..
There are some Agents who also specialise in sales/purchase of land per se.. I can't remember if they've got a fancy name, but a bit of surfing should bring something up!
A quick Google brought this site up : http://www.uklanddirectory.org.uk/selling-land-uk....
Might have some useful info. on it.
If you're concerned about someone changing the use of the land, to say residential you could put a clause in there to enable your parents/you to benefit from any profit from the sale of the land.. Of course you might have to forfeit some of it's current value to do that..
There are some Agents who also specialise in sales/purchase of land per se.. I can't remember if they've got a fancy name, but a bit of surfing should bring something up!
A quick Google brought this site up : http://www.uklanddirectory.org.uk/selling-land-uk....
Might have some useful info. on it.
If you're concerned about someone changing the use of the land, to say residential you could put a clause in there to enable your parents/you to benefit from any profit from the sale of the land.. Of course you might have to forfeit some of it's current value to do that..
Sell all the land, but with a clause in the contract that states that, should building permission become available in the future (timescales in contract perhaps) half the land (how to determine which half would be in contract) must be sold back to my parents at original purchase price. That way, buyer gets the land for her own use (for ever perhaps, if no building ever allowed) and if permission is granted, she and my folks get the benefit. Sounds a bit favourable to my parents of course, but alternative is that they might just tell her they've decided to keep the land and not sell it after all. Hope that explains.
Why would your parents want the land back?? They don't appear to be developers that could do anything with it. Surely their interest is in the cash the land produces. Anyone who gets planning permission is not likely to want to see half his plot return to the seller as his development may depend on having all the land and your parents could hold him hostage for whatever price they liked for the returned land. I'm not an expert, but I suspect that even if you find someone to agree to that, the price will be less than if your parents just wanted a cash share of the value.
The opportunity to build on this plot of land is of great interest to my parents (it's a fantastic location, which is why it's unlikley to be buildable soon!). Cash for the sale less so, which means they'll just keep it if no interest in a buy-back deal. So, the opportunity will not be anybody else's unless they like this idea. The interested party could do what she wants with the land in the meantime, though this could only really be for accommodating animals, as there's no permission to build at the moment.
Hobo said:
Easily done, clawback clause. Many country types put these in just in case planning is ever given in the future. It basically gives than x% of the uplift in value if/when planning is achieved.
^^^^ What Hobo says. Get yourself an experienced Land Lawyer - they'll easily come up with a suitable form of wording.The other way of doing it, depending upon the precise location of and access to the land, is to retain a 'ransom strip' a few feet wide down whichever boundary any future development access will need to cross. You can grant rights of access across this for the purchaser for limited purposed (eg. agricultural access), but it will prevent future development of the land unless the developer buys the ransom strip.
Or perhaps rather than a claw back clause as stated by Hobo why not just put a planning and sales overage in to the contract (inflation and index-linked of course)?
That way the parents get a stated amount now with a guarantee that if they exceed this base scheme (that the offer has been made upon) your parents get a stated amount per unit achieved in excess of this base scheme (usually the private net sellable square footage) and then if they exceed an agreed £ per sq ft on the sales your parents get 30-50% of this agreed uplift.
Simple.
I don't think that anyone is going to agree to paying for some land now and then giving half of it back in the future at the price they paid for it now. why on earth would someone agree to do that? The developer will have spent a shed load of money on gaining planning (not just architects fees but planning consultants, political consultants (it's greenbelt after all), surveys and reports and they wont want to give half their site away. Once you've got a planning permission that land becomes an asset to be sweated.
That way the parents get a stated amount now with a guarantee that if they exceed this base scheme (that the offer has been made upon) your parents get a stated amount per unit achieved in excess of this base scheme (usually the private net sellable square footage) and then if they exceed an agreed £ per sq ft on the sales your parents get 30-50% of this agreed uplift.
Simple.
I don't think that anyone is going to agree to paying for some land now and then giving half of it back in the future at the price they paid for it now. why on earth would someone agree to do that? The developer will have spent a shed load of money on gaining planning (not just architects fees but planning consultants, political consultants (it's greenbelt after all), surveys and reports and they wont want to give half their site away. Once you've got a planning permission that land becomes an asset to be sweated.
Oi_Oi_Savaloy said:
I don't think that anyone is going to agree to paying for some land now and then giving half of it back in the future at the price they paid for it now. why on earth would someone agree to do that? The developer will have spent a shed load of money on gaining planning (not just architects fees but planning consultants, political consultants (it's greenbelt after all), surveys and reports and they wont want to give half their site away. Once you've got a planning permission that land becomes an asset to be sweated.
The buyer wouldn't necessarily be the one to secure planning permission. It would be up to both parties to monitor the release of green belt, and investigate any potential relaxation in the planning rules. I haven't a clue how all this would be detailed in a contract, but the point is, the buyer wouldn't have even had access to any of the land without such a deal, so having to 'give half away' is irrelevant. Looked at another way, they're buying half the land, but getting to use all of it until such time as it could be developed. Why not sell just half the land then? ... because of the burden of managing it (felling wobbly trees and fencing repairs and fear of gypsies etc.).
Useful comments from everyone so far, so thanks for considering this madcap plan! That's parents for you!
Keep it coming.In order to stop any buyer of your land from flipping it (ie. buying your land and then immediately selling it on for a profit) you can either have a 'non-flip' clause in the contract or if your parents don't mind whom buys the land you can stipulate a clause that says your parents will receive 50% of any uplift in excess of the price paid for the land.
That way you can keep your eye on things without having to worry about it.
Plus it'll stop certain land traders and parties only interested in flipping your land from making an offer.
That way you can keep your eye on things without having to worry about it.
Plus it'll stop certain land traders and parties only interested in flipping your land from making an offer.
Tobee - tell me where it is and I'll get a planning report done on it FOC. That'll save your parents a shed load of money, hassle and worry.
Not on here obviously. PM me if you want. Happy to sign a confidentially clause if that makes any difference.
I know how these things can play on people's minds.
Incidentally if it is greenbelt and you want to get planning permission (even a single house) on it you're going to have to make representations to the council to have that land re-designated in the next Unitary Development Plan for your area (aka the local planning bible). To find out when the UDP comes up for renewal give the council a call and go through to the duty planning officer. I'm assuming this land is not in London. If it is - find out when the London Development Framework for your is due to be adopted (they are currently being draw up at the moment so you need to get your representations in soon).
Not on here obviously. PM me if you want. Happy to sign a confidentially clause if that makes any difference.
I know how these things can play on people's minds.
Incidentally if it is greenbelt and you want to get planning permission (even a single house) on it you're going to have to make representations to the council to have that land re-designated in the next Unitary Development Plan for your area (aka the local planning bible). To find out when the UDP comes up for renewal give the council a call and go through to the duty planning officer. I'm assuming this land is not in London. If it is - find out when the London Development Framework for your is due to be adopted (they are currently being draw up at the moment so you need to get your representations in soon).
So let me get this straight - you or your parents lack the ability, cash or nouse to get planning permission on the site. You want to sell the site because you can't build on it. BUT, if someone else has the wherewithall to get planning or build on it, you want some of the land back??
Ridiculous. Why would anybody want to buy the land under these conditions? You want someone else to take the risk, but want to profit from it. Bloody lazy if you ask me.
Ridiculous. Why would anybody want to buy the land under these conditions? You want someone else to take the risk, but want to profit from it. Bloody lazy if you ask me.
johnfm said:
So let me get this straight - you or your parents lack the ability, cash or nouse to get planning permission on the site. You want to sell the site because you can't build on it. BUT, if someone else has the wherewithall to get planning or build on it, you want some of the land back??
Ridiculous. Why would anybody want to buy the land under these conditions? You want someone else to take the risk, but want to profit from it. Bloody lazy if you ask me.
You've misunderstood the issue here, and become mildly abusive in the process. Not at all helpful. Ridiculous. Why would anybody want to buy the land under these conditions? You want someone else to take the risk, but want to profit from it. Bloody lazy if you ask me.
Don't think a 'land clawback' would work particularly well unfortunately as the purchaser, when applying for planning, would look to make the most of the area which wasn't to be given back & as such may put what could be built onto the other area at risk.
I would suggest the following options:
a) Simplest. A standard clawback via a % of increase in planning upon reciept of such
b) Ransom strip as suggested by Sam68
or
c) Dont sell & hold on until it gets planning. This is ultimately the only way to maximise the worth.
You can't have it all ways unfortunately. Who's to say the land will get planning in the next 50 years ? If not then I suspect you're parent will see no benefit at all. If they want/need the money then take option a) or b), if not then c) & pass it down the family until it inevitably gains approval.
An employee of mine has just inherited 7 acres of greenbelt himself which has been in his family for decades. He has chosen to give 'exclusivity' to a developer for a couple of years with an agreed sale price of £millions should planning be approval during this period.
Whilst JohnFM may have been a little 'direct' he his ultimately correct. Why should they have it a win/win situation if they do not have the time/skill/intent to achieve planning themselves ?
I would suggest the following options:
a) Simplest. A standard clawback via a % of increase in planning upon reciept of such
b) Ransom strip as suggested by Sam68
or
c) Dont sell & hold on until it gets planning. This is ultimately the only way to maximise the worth.
You can't have it all ways unfortunately. Who's to say the land will get planning in the next 50 years ? If not then I suspect you're parent will see no benefit at all. If they want/need the money then take option a) or b), if not then c) & pass it down the family until it inevitably gains approval.
An employee of mine has just inherited 7 acres of greenbelt himself which has been in his family for decades. He has chosen to give 'exclusivity' to a developer for a couple of years with an agreed sale price of £millions should planning be approval during this period.
Whilst JohnFM may have been a little 'direct' he his ultimately correct. Why should they have it a win/win situation if they do not have the time/skill/intent to achieve planning themselves ?
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