Woolley was approached by a family who owned four plots situated within a larger land area in an expensive location, comprising a total of 17 plots. The land was identified in the Local Plan as a proposed allocation. A developer owned a parcel of land which surrounded the 17 plots and sent Option Agreements to all 17 landowners with a view to acquiring all of the land. Woolley identified that the developer was trying to acquire the 17 plots in order to assemble all the land together and restructure the design.
It was a case, now increasingly common, where a company had bought the block of land containing the seventeen plots long prior to the land being possibly allocated for development. They then advertised and sold on the seventeen potential ‘plots’ to unsuspecting individuals, who thought they were making a sound investment for the future, paying over £10,000 for each potential plot. However, the original owners still retained a further overage payment if and when the land ever did get consent for development and moreover retained their planned internal road system, so that ultimately, they could ensure no-one could buy up the plots without paying them yet more money for the privilege.
The new owners had not been advised by any development expert that developers would not interested in buying land in such a broken-up state. Normally, developers are only interested in purchasing land in blocks of overall development size, with no complications or third-party ownerships, which they can design and layout to meet their own needs and so maximise returns.
The developer, who owned the ‘envelope’ of land around the plots was being bullish with our client to try and force them into agreeing to their Option Agreement and at a very low price for that market area. Woolley read through the Option Agreement to find it was fundamentally flawed in very many areas, offering little or no protection to the landowning family. Woolley clearly set out what would usually be expected within an Option Agreement explaining to the client why certain clauses should be inserted into the Agreement, which after such explanation, the client fully understood.
The client was extremely pleased they had contacted Woolley, as they did not realise how flawed the Agreement was. Woolley set out a clear action plan for the family of two routes they could go down, in order to move forward.
This scenario demonstrates why it is crucial to appoint a specialist such as Woolley in advising on Option and Promotion Agreements before anything is signed.