Development appraisals

Question 1

what are the principles of the golden brick

Answer 1

“Golden Brick” is a mechanism which enables a developer to complete a sale of VAT elected land to a Registered Provider (RP) before practical completion of the affordable housing dwellings and for that sale to be treated as a zero- rated supply for VAT purposes rather than a standard rated supply.

Question 2

what is the process, under an option agreement, once a site has been granted OPP or DPP

Answer 2

• 6 week JR period
  -confirmation of SPP
• service of PN
• negotiation of MV or MP;
• exercise options
• payment of deposit
  -completion of sale

Question 3

CIL - what is the process of paying

Answer 3

CIL 1 form
notification of commencement of development
discharge pre commencement conditions, etc etc

Question 4

talk me though the CPO 2004

Answer 4

Compulsory purchase is a legal mechanism by acquiring authorities can acquire land without the consent of the owner. Compulsory purchase powers can support the delivery of a range of development, regeneration and infrastructure projects in the public interest

Compensation is based on the principle of ‘equivalence’. That is, compensated parties should be no better or worse off after the purchase. Compensated parties have a duty to mitigate their losses, and business occupiers have a duty to minimise any potential loss of profits.

The assessment of compensation is covered by the Land Compensation Act 1961 and Section 5 provides five rules for assessing compensation:

No allowance shall be made on account of the acquisition being compulsory.
The value of the land shall, subject as hereinafter provided, be taken to be the amount which the land if sold on the open market by a willing seller might be expected to realise.

The Planning and Compulsory Purchase Act 2004 is a key element of the Government’s agenda for speeding up the planning system. The provisions introduce powers which allow for the reform and speeding up of the plans system and an increase in the predictability of planning decisions, the speeding up of the handling of major infrastructure projects and the need for simplified planning zones to be identified in the strategic plan for a regio

Question 5

MP V Min Return

Answer 5

A minimum price provision within the agreement will prevent a sale unless a certain price threshold is met.

min return is the min returnable to the landowner

Question 6

types of equalisation

Answer 6

Collaboration agreements are an essential tool, setting out the rules of engagement between the parties. It is crucial that landowners sign up early to avoid discord later on, acknowledging that they are all critical to the scheme and must therefore receive a fair share of the eventual sale proceeds.

The legal agreement will protect, for example, a party who owns land that is best placed to accommodate essential but lower value facilities such as a school or play areas, recognising that this enables another party’s land to accommodate a greater proportion of higher value development such as housing.

There are different approaches to collaboration and sharing out the sale proceeds. In an equalisation approach, the payment each landowner receives takes into account existing use value, as well as dividing the net sale proceeds by the area of land they each contributed to the scheme. This approach allows each landowner to retain their ownership until the point of sale.

A land pooling trust involves the landowners transferring their land into a trust. This way the entire site is owned by the trust and all the landowners have shares in the trust in proportion to their original ownership.

There are tax implications in each approach and specialist advice is essential.

Question 7

difference between an Overage and Restrictive Covenant

Answer 7

For a restrictive covenant to operate to bind successive owners and to restrict the use of that property, certain formalities must be observed:

The covenant must be restrictive (or negative) in nature. A positive obligation (such as a requirement to maintain a fence) will not be capable of subsisting as a restrictive covenant.
The covenant must be drafted so as to bind successors in title (and not be personal to the original covenanting parties).
The covenant must be imposed for the benefit of other land; and
The party whose land is burdened must have notice of the covenant.

Overage (or clawback): Generally, obtaining planning permission to develop land from, say, agricultural use to residential development will increase land value dramatically. Overage is an agreement between seller and buyer that, in the event the buyer obtains planning permission within a given period (overage period) the seller will be entitled to a share of the increase in value from the grant of planning permission.

Question 8

what is a deed of covenant

Answer 8

Deed of Covenant Meaning
In conveyancing, a deed of covenant is a legally binding document that sets out the terms, conditions, and obligations between two parties, for example the freeholder and the leaseholder of leasehold property.
Largely affecting leasehold properties, a Deed of Covenant is a legal document which states that the leaseholder agrees to undertake an obligation or series of obligations laid out by the freeholder (or landlord).

The Deed is essentially the document that lays out the covenants (or promises) that should be adhered to when a new leasehold property owner takes control.

Having this document in place serves to protect the freeholder and management company as leaseholders are legally bound by the clauses.