Skeletons in the closet – or under your development site!

When contemplating a new development, due diligence is invaluable. From enquiries of utility providers, to the potential for the unexpected, a prudent developer will try to deal with as many ‘nasties’ as possible at the outset.

As shown by the discovery of a former chapel graveyard beneath the proposed second Metrolink crossing in Manchester, and the uncovering of one of Britain’s largest medieval cemeteries under land at the University of Cambridge, property development can give rise to some unexpected complications.

In addition to the standard searches carried out as part of a property acquisition, it is imperative that developers go one step further and carry out a more in-depth due diligence process prior to acquiring a site. Enquiries should be made of utility providers (gas, water, electricity, and telecoms amongst others), and additional questions should be raised with local authorities to ensure that there is nothing planned which could detrimentally impact on development.

Legal due diligence will not, however, pick up all possible pitfalls. Technical searches and site investigations must be undertaken so that the viability of the site and proposed development can be established at an early stage.

It is also vital that developers establish a structure for the transaction that gives them both the comfort that the land acquisition can proceed should the site be viable and allows withdrawal in the event that a serious issue is revealed. Although many issues can be remedied or accommodated the serious delays and expenditure caused may put the whole development at risk and the developer who discovers an unknown graveyard may wish to look elsewhere.

Given the financial outlay required in order to obtain a return on development sites, the more issues that can be ‘laid to rest‘ prior to any development, the better!

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