Unless you are building to rent, your ultimate aim as a residential developer will be to sell your plots as quickly as possible early in the process, preferably off plan, and critically at a profit!
While we can’t control your profit margin, we can help you to achieve quick plot sales. For this you will need to have everything ready to be included in the contract pack so that it can be issued to the buyers’ solicitors as soon as a plot has been reserved.
What should the contract pack contain?
Transaction documents
This will comprise a draft contract for the sale of the plot plus a transfer (if selling on a freehold basis) or lease (if the plots are to be leasehold). We will draft template documents to be included in the contract pack which are then tailored on each plot sale to reflect that particular transaction i.e. plot/postal address, buyer’s name and price etc.
The template transfer (or lease) will grant and reserve the necessary rights and impose the various covenants to which the plot buyers will be subject. It will also reflect the agreed estate management regime (see below).
Information sheet
We will work with you to produce an information sheet which explains the history of the development, the legal title and the agreed estate management regime and which also confirms your compliance with planning permission conditions, planning agreement obligations and building regulations etc. The purpose of the information sheet is to accelerate and streamline the process by reducing the number of enquiries raised by the buyers’ solicitors.
Land Registry compliant plans
You will need plot specific plans showing the red lined boundaries for each individual plot. These are required for the registration of the plots at Land Registry, and they need to be an accurate reflection of the plot boundaries as actually constructed.
A master plan showing all the outlined plot boundaries, roadways, communal areas and the routes of any service easements that cross the development can also assist the sale process. This master plan can be provided to Land Registry for what is called “Estate Layout Approval”. Provided that the individual plot plans accord with the master plan and that the plots have been constructed to reflect the master plan, the Estate Layout Approval will assist the buyers in getting their plots registered at Land Registry in due course.
If the site layout changes during the course of construction, then the plans will need to be updated accordingly, and a further Estate Layout Approval obtained.
Planning documents
A copy of all relevant planning permissions should be included in the contract pack. This includes any detailed permissions, outline permissions, reserved matter approvals and non-material amendments and variations etc. The pack should also contain any confirmation of condition discharges issued by the Local Planning Authority.
You should ensure that all pre-commencement and pre-occupation planning permission conditions have been formally discharged (where required) and that evidence is provided for inclusion in the contract pack. The buyers’ solicitors will want to see copies of documents available at the point at which the contract is issued and also the up to date position as the development progresses towards practical completion.
S106 Agreement and Community Infrastructure Levy
If the development is subject to a Section 106 Agreement, a copy of it should be included in the contract pack together with any subsequent deeds of variation and evidence of payment of all requisite financial contributions and compliance with other non-monetary obligations.
If the development is in an area where the local authority has implemented a Community Infrastructure Levy (“CIL”), the contract pack should contain evidence of your assumption of liability to pay the CIL and that all required payments have been made to date.
If any payments aren’t yet due at the point of reservation, the buyers’ solicitors will want confirmation that you will make the necessary payments as they become due.
New Homes Warranty and building regulations
You should have your development registered with a New Homes Warranty provider and have all the necessary documentation set up ready to be issued on completion of each plot sale. The contract pack should contain all the relevant details because the buyers’ solicitors will need to have the details available prior to completion so that they can activate the relevant cover on legal completion.
Will the warranty provider also provide the building regulations completion certificate? Or is that to be dealt with by a different entity? The contract pack should explain how this will be dealt with.
The Initial Notice should be included in the contract pack, and we will send the Final Certificate to the buyers’ solicitors once available and before legal completion as evidence that the completed construction complies with building regulations.
Infrastructure
Is the various site infrastructure to be adopted? If so, copies of the adoption agreements will need to be included in the contract pack. If these haven’t been entered into yet, the contract will need to contain provisions dealing their completion.
Estate management regime
For items of infrastructure and/or communal use which will not be adopted you will need a solution for their onward maintenance. Will these sit within a management company or are these things which you will retain responsibility for? The contract pack should explain the proposed estate management regime and also contain a draft service charge budget for the maintenance of these items.
If they are to be transferred to a resident-owned management company we can assist with the incorporation of that company, the transfer of the relevant areas to it on completion of the last plot sale and ultimately transferring control of the company to the residents.
If the areas are to be transferred to a non-resident owned management company, then that management company will need to be involved with the drafting of the plot transfers/leases as they will likely have their own provisions which they will want to include. It is therefore essential that very early on you have clarity on your proposed estate management regime.
Other useful information to include
Other useful documents which should be included in the contract pack are:
- Predicted Energy Performance Certificate
- Confirmation of the plot numbers and postal addresses
- Fire risk assessments for the communal areas if you are selling apartments
- Building insurance schedule for any apartment blocks
- Tree Preservation Orders (if any) and any consents under the same
In addition to the above, there may be other site-specific issues which we can help you address so as not to delay plot sales.
If you require any assistance with the setting up of your residential development scheme or any other development matter, then please do contact Amanjot Sidhu.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here. Definitive advice can only be given with full knowledge of all relevant facts. If you need such advice please contact a member of our professional staff.
The information published across our Knowledge Base is correct at the time of going to press.
