by Niall Logan
Property developers are currently experiencing some of the more depressed and uncertain trading conditions which their industry has ever seen. It should not be assumed, however, that the property market is completely dead. Whatever the state of the market, prospective developers will always be on the look-out for sites which, for one reason or another, are less speculative and more likely to be completed successfully. It is important, therefore, that any potential site is investigated thoroughly and not dismissed simply because it is considered initially to be “difficult”.
Potential areas of difficulty fall broadly into four categories — planning, funding, site assembly and physical. It is not intended to devote any space to the first two categories, but good practice dictates that both planning and funding should be addressed at the earliest possible stage.
The third potential area of difficulty is site assembly. Does the landowner actually have title to what he claims he owns? There may, of course, be more than one landowner to complicate matters further. Is the site vacant? If not, can the occupants be required to vacate? If so, when and at what cost? Is the site affected by third-party rights such as restrictive covenants or rights of way? All these matters need to be identified and dealt with, before the bulldozers move in.
What can the developer do if one or more of the current owners of the site refuse to negotiate with him or are completely unreasonable in their demands? He could talk to the local authority or, if appropriate, the urban development corporation responsible for the area, to see if they would be prepared to use their compulsory purchase powers to assist with site assembly. If the development fits in with their planning strategy, and they can see gains for the community, they may well agree to this.
How else might the local authority or UDC be useful? If the site has ever been owned by a local authority or UDC it is possible that their successors in title may have the benefit of their overriding provisions, which effectively means that some third-party rights can be ignored, subject in certain circumstances to the payment of limited compensation. Of course, there is not only the immediate site to consider. Rights may be needed over adjoining land for access or to lay sewers.
All potential sites need a site constraint report, which is effectively the lawyer’s MOT. A comprehensive series of checks will be carried out and the result will be a report which, from the property lawyer’s point of view, details the advantages and disadvantages of the particular site. The sooner any difficulties are identified, the sooner they can be solved or, if appropriate, ignored.
The fourth category of difficulty is the site which is physically hard to develop. A site which has certain physical problems may be dismissed by the unimaginative or inexperienced developer. All professional advisers should be alert to point out the advantages as well as the disadvantages of any site, especially if these are not obvious.
What sort of problems sometimes become apparent following the usual site surveys, investigations and searches? The site, for example, might be unstable owing to previous underground coal workings. This could be revealed by the normal British Coal search or a more detailed investigation by specialists. If the site is in an area of shallow workings which could collapse at any time, something will need to be done. While statutory remedies for damage caused by subsidence may be available if the worst happened, prevention is considerably better than cure on this occasion. There are three solutions:
(1) The old workings could be grouted, that is the spaces beneath the surface filled in to provide support for the strata above and thus prevent a collapse of the old workings.
(2) It may be possible to excavate the shallow workings by opencast coal extraction, which will be described in more detail later.
(3) If the fear of subsidence was remote, it might be possible to construct buildings on the development with special foundations such as rafts so as to avoid or minimise damage if the worst occurred.
Unfortunately, the first and third of these alternatives would increase the cost of the development, making it less profitable and consequently less attractive. However, the second alternative may have advantages.
Another possible difficulty is the contamination of the surface of the site. If there has been a processing operation on the site, such as a chemical plant or a cokeworks or tarworks, it is very likely that the site will be contaminated by a variety of substances. Sometimes quite unexpected businesses produce hazards — a site formerly occupied by a clockmaker was, on investigation, found to be radioactive! It is now more important than ever to investigate thoroughly the historical use of the potential development site. This process will be helped to some extent by the contaminated land registers, which local authorities are having to set up under the Environmental Protection Act 1990, but other avenues such as raising inquiries of previous owners and looking at the planning history of the site will need to be explored. If contamination is found to exist, then development is unlikely unless the contamination is removed — potentially an expensive operation, but one which might reap unexpected dividends.
If the site is in a coal-mining area, like the previous example, the developer should investigate the possibility of opencasting the site. This would, of course, need to be licensed by British Coal. If this were feasible, the developer would be able to remove the contaminated areas and perhaps, even more important, may be able to recover the cost of this and indeed finance part of the development through the opencast contract. As mentioned earlier, the stability of a site affected by shallow workings will be greatly improved if it is opencast. Furthermore, restoration of the site could be worked out to the precise contours required for the proposed development. The restoration process could include the compaction of the fill material in such a way as to enable immediate development to take place. Therefore, if the site is unstable or contaminated or both, opencasting will be a positive benefit to its development. Opencasting, being generally an unpopular operation, could well be less controversial in these circumstances, offering general improvement of a rundown or derelict site.
Another possible difficulty which may be encountered is the location of old spoil heaps or tips on the site. These may have to be removed to enable the site to be developed. Indeed, the local authority may require this to be done under powers contained in the Mines and Quarries (Tips) Act 1969. While this might at first sight seem a costly operation it is not necessarily so. Old tips often contain valuable material, including coal, and, once again, provided the requisite consents were obtained from the owner of the material in the tip, the removal of the tip could pay for itself and indeed produce a profit that could be put back into the development. In the absence of valuable material in the tip, regrading and recontouring could enhance the development.
Finally, there is the possibility of shafts within the site. Old shafts can be found all over the country, and are by no means restricted to sites of known collieries. They will probably have been filled and capped at some time, but the longer ago this occurred, generally speaking, the less safe they could be, since the fill material may have collapsed leaving merely a cap at the top of the shaft. This may consist of only a few feet of soil on top of some wooden planks. It is very dangerous to build over or in the vicinity of a shaft, in case of collapse, and to do so would be to lay the developer open to potential liability, but it might be possible to eliminate more shallow shafts if the site is opencast. If shafts remain, however, the development will have to be planned around them, but this is usually feasible and they can be incorporated in open spaces, or indeed a car park can be built on top of a properly treated shaft.
These then are some of the potential problems which might be encountered in the development of a site, but some may prove to be hidden advantages.
The developer should not, therefore, dismiss what might appear at first glance to be a site which is too difficult or expensive to develop. Good professional advisers can identify any advantages, whether they are apparent or not, of a site. These can be properly considered to see whether the development is feasible, and the difficult site may, in fact, turn out to be the one with the most potential.
