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Property Development – Your Obligations

Undertaking property development? Then do not underestimate your legal obligations such as building regulations, planning permissions, planning conditions and planning restrictions and The Community Infrastructure Levy.

Undertaking property development? Then do not underestimate your legal obligations such as building regulations, planning permissions, planning conditions and planning restrictions and The Community Infrastructure Levy.

As a property developer there are numerous things that you need to consider in the planning of any development. Location, finance, style of development, timescale, contractors and potential buyers. But your legal obligations as a property developer should not be underestimated either. Mistakes or breaches of the law could result in costly property disputes and financial loss – exactly the opposite of your primary aim to make money and build a great reputation as a developer.

Building Regulations

Whether you are completely ripping out and refurbishing a property, building a whole new development from scratch or simply adding an extension to a property you must consider the role of buildings regulations. Your local authority can give you lots of information in relation to buildings regulations but in particular it is important for you to know what types of property development will and will not be subject to buildings regulations requirements. If you are employing a building contractor agree with them at the outset whose responsibility it will be to make sure the regulations have been complied with. A building control surveyor can check a development regularly for you to ensure compliance.

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A well-advised purchaser of a property will ask for the necessary certificates of compliance with building regulations before committing itself to buying – so make sure these regulations are at the fore front of your mind otherwise you may not be able to sell the property once you have completed your work.

Failure to comply with buildings regulations can lead to costly court proceedings, fines and you being ordered to fix the building works at your own cost.

Planning permission, planning restrictions and Section 106 agreements

Most developments will also require planning permission from your local authority. Obtaining planning permission can be a lengthy and costly process but a professional planning consultant will be able to help you with the necessary forms, specifications and plans. Consider making the purchase of a property or site conditional on obtaining planning permission before committing yourself, especially where planning permission might be particularly difficult to obtain. And once you have obtained planning permission make sure that it covers everything that you need and that you are happy you can comply with it in full before starting work.

Local planning restrictions may be in force in certain areas which will affect the planning permissions you can obtain and the conditions associated with the planning permission. For example, the property may be in a conservation area or there may be trees subject to protection orders. All of these things will govern what you can and cannot do. Ensure that you know of any planning restrictions and planning conditions and that you are in full compliance of them as otherwise the local authority can take enforcement action against you for breach.

In addition, as part of the planning permission process you may have to enter into a Section 106 Agreement with the local authority. Also known as a planning obligations agreement, these types of agreement confer a legal responsibility on the developer to do or contribute something for the good of the local area e.g. widening access roads or putting flood defences in place. If the development is large-scale this might include providing a certain amount of affordable housing.

The Community Infrastructure Levy

The Community Infrastructure Levy (CIL) allows local authorities to raise funds from developers undertaking new projects in the area so that the money can be used to fund a wide range of infrastructure. Charging schedules and rates vary between local authorities but the levy is charged in pounds per square metre on the net additional increase in floor space of any relevant development. You should speak to a planning consultant or your local authority about CIL before undertaking any development work as otherwise you may be liable for very large unexpected costs.

Our dedicated team of solicitors, based in Witney, Oxfordshire, would be happy to answer your questions.

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