Landowners have become ever more sophisticated in their approach to increasing the value of land. When I started in practice options and conditional sale agreements were the traditional choices. Over the last thirty years new arrangements have been devised and amplified.
Overage agreements and then planning promotion agreements have been added to the armoury. Allied to this trend has been the greater thought given to ransom situations whether due to an actual ransom strip or alternatively the reliance on the existence of a restrictive covenant or easement to block a proposed development unless released in return for payment.
As a result drafting has become more complex particularly due to the need to ensure maximum protection is provided for rights which are not themselves enduring property rights. It is an interesting area of the law but a demanding one.
- explains the concept;
- discusses alternatives;
- warns of traps;
- highlights drafting points;
- debates means of protection including restrictive covenants and chains of covenants
To assist with drafting a basic checklist can be seen here.
Good faith / fiduciary obligations – The use of such property arrangements has increased uncertainty as they are no longer exclusively governed by contract. Equity has intervened with the operation of such arrangements to introduce independent obligations of good faith. The recent decisions of Berkeley Community Villages v Pullen; Ross River v Cambridge FC; and Ross River v Waveley are discussed in this article Imposing fiduciary obligations into property ventures.
Injunction or damages – in the context of ransom situations the law relating to remedies plays a crucial role. Even in Victorian times the significance of an injunction was understood. In 1863 Lord Westbury stated that the Court may be “delivering over the Defendants to the Plaintiff bound hand and foot, in order to be made subject to any extortionate demand that he may by possibility make.” (Isenberg v East India House Estate Co Limited).
The increasing popular appreciation of the financial rewards to be gained from the grant of an injunction has meant that the law relating to remedies has an important role to play.
Recession – the commercial property and development worlds have been hit hard by the recession. Ideas are explored in the linked paper as to what possibilities there are for arrangements taking account of the recession. Encouraging transactions with advice.
If you have any queries please contact me.