The background

When carrying out our initial review of the information relating to the development, we noted the following issues:

• A historic restrictive covenant preventing buildings from being erected on part of the development land
• Boundary discrepancies between the title plan showing the legal boundary of the site and the physical boundaries on the site
• A requirement to acquire small additional parcels of adjoining land to enable the proposed layout and access arrangements

Each issue carried its own risk for the developer and, importantly, for the developer’s lender and eventual plot purchasers.

Restrictive covenant preventing development

The most significant issue was a restrictive covenant contained in a historic conveyance that prohibited the erection of buildings on part of the land which made up the development. Although the covenant was decades old, it still had the potential to be enforceable by the successors in title to neighbouring land.

Ignoring the covenant or relying on indemnity insurance was not appropriate in this case, as the proposed development would clearly breach the restrictive covenant and the developer’s lender had also specified that they required the development land to be released from the covenant before they would release any further funding to the developer.

We therefore undertook title tracing to identify the party with the benefit of the covenant. Following investigation of the historic conveyancing documents and neighbouring titles, we were able to identify the current beneficiary of the covenant.

We negotiated a deed of release with the relevant parties, formally releasing the restrictive covenant insofar as it affected the development site. The deed was carefully drafted to ensure the release bound successors in title and removed the risk for the whole development rather than simply for the initial developer.

This step was critical in making the site legally capable of being developed and later sold in plots without ongoing title concerns.

Resolving boundary discrepancies

During the title review and comparison with the site layout plans, it became apparent that there were inconsistencies between the registered legal title plan and the intended and physical boundaries on the ground.

Working with the developer and their surveyors, we:

• Reviewed land registry records and plans produced by our client’s architect
• Assessed the position of physical boundary features on site with our client
• Agreed the correct boundary positions with neighbouring landowners
• Liaised with the Land Registry to have slight boundary discrepancies resolved so that we could obtain Estate Layout approval for the development

Acquiring additional land

Some of the boundary issues identified were unable to be resolved by obtaining revised plans and liaising with the Land Registry. Consequently, where necessary, we negotiated and completed transfers of additional land from the neighbouring land owners to our client, ensuring that:

• The transfers meant the land owned by our client aligned with the development layout plans provided and the additional land was incorporated into the main development title
• Necessary rights (such as access and service media rights) were included

Care was also taken to ensure that the newly acquired land was free from restrictions and/ or covenants that could affect the wider development.

Outcome

By resolving these issues early in the transaction process, the developer was able to proceed with a clean and marketable title across the entire development site. This allowed:

• planning proposals to proceed without title uncertainty
• the release of further funding to our client from their lender
• plot sales to take place without title complications

Key takeaways for residential developers

This project highlights several common but critical legal issues that can arise in residential development:

• Historic restrictive covenants can still be enforceable and should be investigated carefully
• Boundary discrepancies should be addressed early to avoid problems with site layout and plot sales
• Small parcels of adjoining land can be crucial to the success of a scheme and should be dealt with to ensure the development works as planned.
• Early legal due diligence and proactive title management can prevent delays later in the development process and ensure that a site is fully “development ready”.

If you are acquiring or developing land, addressing title restrictions, boundary issues and land assembly at an early stage can significantly reduce risk and avoid costly delays. This is something our team will explore in detail when we are instructed on a new site to make sure that once plots are ready to be sold, everything runs smoothly.

If you require any advice in respect of your development, please do not hesitate to contact our Residential Development Team.