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Published 29 August 2023
Many housebuilders will purchase land without the benefit of planning. Perhaps the site is allocated, perhaps it has an old extant permission, perhaps they are trying their luck with a positive pre-ap. Often, contracts are not conditional on planning but have a myriad of other conditions which need to be satisfied. There might be an acquisition condition, search condition, site clearance condition, or a registration condition – each of which can take significant time to resolve.
As a result there is often a gap between exchange and completion. During that time planning applications are submitted and granted. In order to reduce legal fees and ensure planning permission is granted without delay, we recommend contracts are drafted requiring the Seller to enter into any Planning Agreement (be that a Section 106 Agreement, highways agreement, or any other infrastructure agreement) should one be required prior to exchange and/or registration with the land registry. Good relationships with the customer teams at the Land Registry can also help to reduce any registration gap. These matters can be easily missed when a contract is not conditional on planning.
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