DEVELOPMENT PROJECTS AT RISK BY SAFEGUARD FAILURES
Multi-million pound residential development projects are being jeopardised by a failure to ensure adequate safeguards are in place to prevent delay or disruption.
Projects can be undermined by reasons as simple as title deeds and actual land borders not matching up. This can result in developers being thwarted in having rights of access from the development site to public highways.
Speaking at a residential development seminar in London today hosted by solicitors Rosling King and Cushman & Wakefield, Ann Ebberson, real estate partner at Rosling King, said:
“We are seeing repeated examples of development projects of varying scale being put at risk by issues over rights of way and restrictive covenants.”
“Looking at land and plans sounds simple enough but the reality is often that they do not match and the implications can be far-reaching. It can mean that access to a site from a public highway is not possible. Furthermore, restrictive covenants which are often a hangover from previous generations can be impediments to development.”
Real Estate Finance partner at Rosling King, James Walton, commented
“it sounds like stating the obvious, but when acquiring or developing a site, a developer should insist that their legal advisers visit the site in question. This can avert a host of problems.”
Jonathan Hyndman, real estate development finance partner at Rosling King, added:
“Projects are delayed for a variety of reasons but the easiest answer as to how delays can be minimised is effective monitoring of works as they progress – by developers, project managers, investors and funders. If that does not happen then the inclusion of enforceable liquidated damages provisions can provide a quick and easy route to compensation, rather than a general damages claim.”
Jack Simmons, Partner, Residential Investment and Development, Cushman & Wakefield, told the seminar:
“When it comes to collateral warranties and all technical paperwork, these things have to be up to speed well in advance. Trying to get them sorted within a few days before a project gets moving is simply not going to happen. Involving legal teams at an early stage can prevent a lot of heartache later.”
Fergus Jack, Partner, Residential Investment & Development, Cushman & Wakefield, said that although the residential development market had cooled in markets such as London, investment was still strong. The Private Rented Sector, he said, is here to stay in terms of development. The growth of PRS development deals has not been as fast as expected but is expected to increase.