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Helping a builder & myself with an agreement.
collectors
Posts: 240 Forumite
in Loans
I have some land that I am getting planning permission for a one house development & to sell on to a builder that I know. To help the builder with the sale I would like to help him & myself to let him build & when sold I would charge him a pre-arranged price of the land plus a 1.5 to 2 % on the sale of the house. What!!!8217;s the best legal way to set this up besides me putting a second charge on his own house. The reason for no second charge is he would then have problems getting a loan for the build if there is already a second charge, but i need to protect myself.
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Don't know the sums involved but I'm guessing they're substantial. Well worth taking advice from a solicitor and getting a contract drawn up.I came into this world with nothing and I've got most of it left.0
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Or......find a builder who can pay for the land upfront.I came into this world with nothing and I've got most of it left.0
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Think i was looking to make the extra £7.5-10,000 & save him borrowing.0
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Fair enough, but do you want to risk the whole enterprise for the promise of more money later. A bird in the hand and all that.collectors wrote: »Think i was looking to make the extra £7.5-10,000 & save him borrowing.I came into this world with nothing and I've got most of it left.0 -
Is he paying the basic site price now with only the top up due on the sale of the new house?0
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OP I do think you are over complicating things.
Either get him to buy the land now from you or enter into a partnership on the development - this can be done with a solicitor.
IMO you have no chance to take a second charge on the builder;s home - I certainly would not allow it if it was me.0 -
I think what you may need is an overage agreement. They aren’t straightforward though so you need to find someone who is really good at drafting them,0
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Thanks for the idea's. Overage agreement or partnership are both good idea's that i will look into.
I am just naturally looking for whats the best deal for me & would also like to make life easy for the builder as he has to put up around a £180k on build cost's. So if i can keep his outlay down & make an extra few pence for myself, we should all be smiling.0
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