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At this stage the client will have identified development opportunity and will have noted that the site is previously developed land.
The way the various factors are to be built up should be assessed to inform the decision about whether or not the acquisition should proceed. As the process develops, these appraisals will be refined as more detailed information comes to hand. The subject areas to be considered as part of the appraisal include:
Appointing advisers
Selecting advisers should be part of formulating in the development strategy.
Site assembly and site ownership
The ease of acquisition is an important early appraisal issue. Land assembly issues are recognised in many developments, particularly with previously developed land. Access to site assembly skills may be vital in assessing whether a project is viable. Single or multi-ownership sites present different issues.
Clients should also establish the presence of other interests, such as easements and rights of way.
Funding strategies
The client should put in place a funding strategy. There is a multiplicity of structures for funding development and suitability will depend upon the client’s commercial circumstances. Any funder will wish to quantify in financial terms the uncertainties associated with the site.
Identifying tax advantages and other funding opportunities
Potential opportunities in respect of previously developed sites include:
The measure is designed to stimulate disadvantaged areas by attracting development and encouraging the purchase of residential and commercial property by individuals and businesses. SI 2001/3747 sets out a list of 1997 disadvantaged areas and SI 2001/3748 brings the provisions in Section 92 and Schedule 30 of the Finance Act 2001 into effect for documents executed on or after 30 November 2001.
The Inland Revenue website link provides a full list of these disadvantaged areas.
For schemes in Scotland and Wales, the respective development agencies also have grant support mechanisms, which are subject to different terms.
Legal issues
The role of lawyers acting on the purchase of a previously developed site is the same as for other sites in that they endeavour to identify areas of liability that may affect their clients or the use and enjoyment of the property.
The Law Society’s warning card on contaminated land makes it clear that all solicitors must consider contamination on every property transaction. Clients and advisers should refer to the text of the warning card.
While contamination may well be an issue on previously developed sites, it is only one of several specialist subjects that may need to be addressed.
What information is required and in what detail – investigation strategies
At the site appraisal and acquisition stage, clients need to resolve how much information will be adequate to satisfy their decision-making procedures in acquiring sites. The process is one of collecting information to build a conceptual model of the site and its surroundings, either in textual or pictorial form, to represent what is known at any given time about site conditions and their implications.
Preliminary investigations, which comprise desk studies and site walkover inspections, form a valuable means of collecting initial data on the site from which broad assessments of the risks and implications that may be associated with the land can be made.
In certain circumstances, this level of information may well be sufficient to enable clients to make necessary decisions with requisite confidence. However, where this is not the case and further data is warranted, these preliminary techniques will have provided the initial contribution to creating the conceptual model upon which more extensive site investigations can be designed. Due care needs to be taken to ensure such initial activities are undertaken effectively, and informed clients may find it advantageous to accompany their advisers at this stage.
The very nature of preliminary data-gathering is inevitably limited when compared with the results that can be obtained from detailed site investigation methods. Actual site data will greatly supplement the original information collected from desk studies and will increase confidence that the overall information package is indeed representative of the site conditions.
Vendor’s information
In view of the exclusion tests contained in the statutory guidance in Part IIA; vendors often provide a package of information that may include a site investigation of their own in an attempt to transfer liability to purchasers. Advisers need to be able to evaluate properly such information for both content and quality.
Consents/permits/licences
A number of consents, permits and licenses are needed at the site appraisal and acquisition stage (Table 2). It is important to set a realistic timetable for obtaining them. On the basis of activity on site at this stage consisting of a walkover survey, clients’ obligations is often limited to obtaining requisite authority for site entry. When it is decided that more extensive (intrusive) investigation activity is needed, further requirements for permits and licences might be sought.
Health and safety
With previously developed sites, however, there is likely to be added potential for health and safety hazards. Should contamination be a potential feature that could cause harm, for example, to workers or the public, the circumstances should be properly addressed from the outset, as soon as access to the site is anticipated.
As the development unfolds and more extensive activities are undertaken for site inspections, detailed site investigations, and possible site demolition and remediation works, other issues with potential impacts on health and safety will have to be considered and managed. Typical situations are:
Developing the site log
Creating the site log from the start of the project is essential to ensure initial data is captured and the possibility of misplacing later key material is minimised.