This looks good on paper

The pace of the economy and construction has picked up over the last couple of years, and developers need to remember that completion of a development also requires the completion of the paper trail, if they are to sell on those schemes without delay.

Most developments are built following the grant of a very detailed planning consent and, even if the development has been done via permitted development rights, there will usually still be a unilateral undertaking, a Section 106 Agreement or a Section 278 Agreement which will form part of
that consent. 

A unilateral undertaking is a pledge from the developer of additional items it will provide or additional conditions the developer will accept to bring the development within local policy. So, for example, it could be a commitment that the scheme will be a car-free scheme, and no parking will be provided, or it could be a pledge to deliver other sustainability targets. 

A Section 106 Agreement is a similar type of document, but is usually a negotiated document between the local authority and the developer setting out the facilities requirements for the development in the form of infrastructure, or, for residential development, it will set out the affordable housing requirement for the development and any payments which are required to help fit the development into the local landscape. These are all requirements to be provided by the developer.

A Section 278 Agreement sets out works which are to be carried out outside the boundaries of the development site and are usually road works or works to the road furniture - for example, road widening or the installation of a new zebra crossing.

Developers have got much better at ensuring that all conditions under a planning consent are discharged and that there is a paper trail dealing with discharge of conditions under a planning consent. 

However, what is often forgotten is that there does need to be evidence of discharge of those conditions. If, for example, materials are to be approved by the local authority, then some written evidence needs to be obtained to prove that the materials were approved before incorporation into the development. This evidence should all be kept in the one place, and a complete set placed with the title deeds of the property. Architects and project managers should be so instructed. 

Evidence should all be kept in the one place, and a complete set placed with the title deeds of the property

This same rigour also needs to be applied to statutory agreements which also support developments, such as Section 106 Agreements or Section 278 Agreements, and this tends to be an area where even the most experienced developers can fall down.

Under Section 106 Agreements, one of the key areas is evidence that any required payments were made in the form of a receipt or a letter of confirmation that the payment was made and acknowledged by the relevant body.

Under Section 278 Agreements the highways consultants often orchestrate payment and the main team does not chase through a receipt. There is often a bond given to support payment for the works if these are being carried out by the highways authority on behalf of the developer. If this is the case, the bond is often reduced after the initial works and a lesser amount retained for the monitoring phase of those highway works. 

Receipts and letters confirming the position all need to be placed with the title deeds as any purchaser will wish to see these as part of the due diligence that the development was carried out and completed in a satisfactory manner. If these confirmations are not available on sale it can be a real delaying factor in effecting any sale of the property as time will need to be taken to retrospectively put this paperwork together. 

Therefore, if a quick sale is required, the lack of evidence that a green travel plan was put in place or that an education contribution was paid can be very costly, so do not be caught out.  Collect this information as part of the development and provide it as a package to your solicitor to add to the title documents. 

Karen Mason is a partner in the property team at Boodle Hatfield