Back
Find out how we are operating following the relaxation of COVID-19 restrictions I We’re here to help; contact us or read our legal insights
Get in Touch Menu

Closing the stable door

24 March 2010

Selling to a developer can be a good way of getting money from land that is not required by its owner. But both parties should know exactly what they are signing up to and how it will affect both the development land and that retained by the owner.

Often, developers enter into option agreements with land owners: the developer agrees to apply for planning consent and the owner agrees to enter into any necessary planning agreements (commonly known as ‘S106 agreements’) with the local authority.

Case Law

  • In one recent case (Nirah Holdings Ltd v British Agricultural Services Ltd and Hanson Building Products Ltd) there was a dispute over whether the land owner was entitled to refuse to enter into the S106 agreement required by the local authority.
  • The planning authority had agreed to grant outline permission for a fresh water visitor attraction and science research park, subject to a S106 agreement. A shuttle bus service route had to be agreed with the planning authority before the development could be opened to visitors.Unfortunately, Hanson, the land owner, refused to approve the S106 agreement.
  • Hanson claimed that the developer had not given them enough details about the route of the proposed bus service. They could not, therefore, assess whether the route would be detrimental to the future use of the land they were retaining.
  • The decision went against the land owner. The court held that Hanson had been given sufficient information and it was unreasonable to withhold approval. The developer was awarded an order for specific performance that required Hanson to enter into the S106 agreement.

Comments

This case illustrates just some of the difficulties that can arise. The option agreement here had been negotiated carefully to strike a balance between the aims of both parties. It contained several important safeguards designed to protect the interests of both the owner and his retained land. However, when the court interpreted the agreement, the owner found he had less control than he had wanted.

Owners should consider issues that are particularly important, such as future plans for the land they are retaining and exactly how much control can they have during the planning application process (too much and the developer may end up with an unworkable development: too little and the owner may get a development that has some adverse effect on his retained land).

What rights and benefits need to be given to the development land and also reserved for the benefit of the retained land? The potential impact of such rights and benefits needs to be carefully assessed before the option agreement is entered into.

 

If you need clear and pragmatic legal advice, we’re here to help so please get in touch.

Contact us

Contact
Nigel Whittaker BA (Hons)
Partner
View profile
Related services
Share this article
Resources to help

Related articles

Top tips for improving wellbeing in the workplace

Commercial

The mental health charity Mind has developed a website, Mental Health at Work, offering a range of resources for employers and employees to help with issues such as work-related stress.…

Jenny Hawrot LLB (Hons)
Senior associate, solicitor

Catch up on our free legal webinars

Commercial

Our legal experts have been busy sharing valuable expertise in their first series of free webinars for employers, and businesses across the county who missed the live events can now…

Willans
Solicitors

Fixed price legal advice for SMEs & the Coronavirus Business Interruption Loan Scheme

Corporate

The Coronavirus Business Interruption Loan Scheme (CBILS) has thrown a much-needed lifeline to businesses experiencing cashflow difficulties as a result of the coronavirus outbreak. 17 December 2020 Today, Rishi Sunak…

Chris Wills LLB (Hons)
Partner
Contact us