Rural Development

Rural Development

We advise clients on development of land and buildings, whether it be proposals for new farm buildings, conversion of farm buildings to residential or office space, infill sites or entirely new development on agricultural land for retails, residential, commercial and mixed-use sites.

The driving forces behind each project vary and can range from preserving and extracting value from present or future development, diversification of estate assets to development with significant legacy considerations.

We advise our clients throughout out the process, starting from the earliest stages to establish the most appropriate type of agreement for the relevant project so as to maximise the chances of success and the potential value of the project both from a tax and development perspective.

We will work with our clients and advisers to negotiate the agreement for development, providing support through the planning process where clients will be required to be party to agreements for the purpose of obtaining a planning consent to handling the end sale of the site. This process also includes dealing with title issues, due diligence requirements and setting up the necessary steps to deal with tenancy issues to enable a sale with vacant possession.

The structure of these arrangements can take many forms, including:

  • Overage and Clawback: on a sale of agricultural or equestrian land away from an estate, the landowner can retain an interest in any future development of the land through overage and clawback arrangements, if the buyer subsequently changes the use of the land or obtains planning permission for development. The grant or implementation of a planning permission will trigger a payment due to the landowner that reflects a proportion of the increase in the value of the site previously sold.
  • Promotion: where a client has land that has prospects for development, exploring the possibilities for development through land promoter is often an attractive option at no or minimal cost to the Landowner. The Landowner will enter into a contract with promoter, who will undertake the full proves of applying and hopefully obtaining a planning permission on the land. The land will then be marketed and sold to a developer/housebuilder, with the promoter taking a share in the proceeds.
  • Conditional Contracts: where a landowner will enter into a direct contract for sale, usually with the developer. The developer will be under an obligation to seek a planning consent in relation to the property. On the grant of what is deemed a satisfactory planning consent then the developer will be under an obligation to acquire the property. The contract will usually specify the purchase price at the point of exchange and the landowner will usually receive payment in full on completion, unless the parties have agreed arrangements for deferred payments.
  • Options: Similarly to a conditional contract, a landowner will enter into an option with the developer, who will be under an obligation to seek a planning consent. The developer will be entitled to exercise an option to purchase the site at any time during the specified period for a price that reflects development value. If the developer does not exercise the option in the prescrived period, the landowner will be free to sell the site with the benefit of planning on the open market.

Where sites are larger, more complex and have significant infrastructure requirements, we have the expertise to advise client on Strategic Land Rural Development projects, which take more complex hybrid and joint venture structures.

Our Rural Land and Business team also have particular expertise in:

“Forsters have a large team of well-trained partners, associates and junior staff. There’s a great level of exposure given to junior staff, which enables them to reduce costs and improve training whilst not jeopardising service level. They are experts in their field and collaborate across all aspects of real estate to provide great service.”
The Legal 500, 2024