Commercial property with land purchase

shaunhouse

I am in the process of purchasing a commercial property and the land adjacent. The title plan shows an unspecified strip of land that separates the land and the road. The current owner has owned the property and land since 2001. The land is unused.



The vendor believes the land to be unregistered and has offered an indemnity costing £500 for continued use of the land.

I potentially want to develop on the land but at the very least use the land for parking. Concerned that someone could lay claim to be land in front and stop our access unless we purchase the strip of land for a ridiculous amount.

Any advice is welcomed.

davidmcn

shaunhouse wrote: »

Concerned that someone could lay claim to be land in front and stop our access unless we purchase the strip of land for a ridiculous amount.

That would be where the indemnity insurers would step in (though I'm not sure why you ought to be paying for the policy - the norm would be that the seller pays).

Don't you have a solicitor advising you on this? If not, now would be a good time to appoint one!

Have you (or the vendor) done any research into who might have a title to the land? I would expect the insurers would want further information before offering a policy. Has the vendor actually been occupying the land as if they were the owner, or just crossing it for access?

diggingdude

davidmcn wrote: »

That would be where the indemnity insurers would step in (though I'm not sure why you ought to be paying for the policy - the norm would be that the seller pays).

Don't you have a solicitor advising you on this? If not, now would be a good time to appoint one!

Have you (or the vendor) done any research into who might have a title to the land? I would expect the insurers would want further information before offering a policy. Has the vendor actually been occupying the land as if they were the owner, or just crossing it for access?

I read it as the vendor offering to provide, probably wrong

Ozzuk

I'd want to know exactly what the policy was indemnifying against, and what it would pay out. Also, if they even can indemnify if they can't prove exclusive use of the land. For example, someone else starts parking there what are you going to do?


All questions for your solicitor...

SmashedAvacado

If you get indemnity insurance you need to make sure that the indemnity insurance allows for change of use of the land - and reflects the value of the developed site - this isnt easy to get because the insurers don't know what you are going to do with the land so the assumption on most policies is that of continuing use. Otherwise you will need to get a new policy once you have got planning permission.

tom9980

shaunhouse wrote: »

I am in the process of purchasing a commercial property and the land adjacent. The title plan shows an unspecified strip of land that separates the land and the road. The current owner has owned the property and land since 2001. The land is unused.



The vendor believes the land to be unregistered and has offered an indemnity costing £500 for continued use of the land.

I potentially want to develop on the land but at the very least use the land for parking. Concerned that someone could lay claim to be land in front and stop our access unless we purchase the strip of land for a ridiculous amount.

Any advice is welcomed.

In my home town there is a developer trying to build 40 odd houses. To do it the planning says they must use access that comes from a development that was built 20 years or so ago, the older developer kept a small strip of land no more than 5m2 much like this strip and they want £1m for it so that the new developer can build.

I suggest you be absolutely sure of ownership of that strip.

shaunhouse

I’ve had the solicitor and surveyor who is acting on behalf of the bank trying to identify it. Neither have managed to.

The indemnity is for continued use as a car park (although at present the land isn’t being used and is derelict)

The strip of land provides access to the car park. Without it we wouldn’t be able to drive or walk onto the land.

shaunhouse

tom9980 wrote: »

In my home town there is a developer trying to build 40 odd houses. To do it the planning says they must use access that comes from a development that was built 20 years or so ago, the older developer kept a small strip of land no more than 5m2 much like this strip and they want £1m for it so that the new developer can build.

I suggest you be absolutely sure of ownership of that strip.

Yes I’ve heard of this also. I have several residential purchases under my belt but this is my first commercial purchase so I want to make sure nothing is overlooked.

diggingdude

shaunhouse wrote: »

I’ve had the solicitor and surveyor who is acting on behalf of the bank trying to identify it. Neither have managed to.

The indemnity is for continued use as a car park (although at present the land isn’t being used and is derelict)

The strip of land provides access to the car park. Without it we wouldn’t be able to drive or walk onto the land.

So I wouldn't be signing anything until they can

davidmcn

diggingdude wrote: »

So I wouldn't be signing anything until they can

Other way round, surely. Not being able to identify any likely owner means you can insure against the risk and forget about it.

Sachs

What do the deeds say about the right of way over that land?

To be honest it sounds like a ransom strip. At some point in the past someone sold that carpark and probably split off the entrance for the sole purpose of getting a payout in the event someone built something.

Unless it happened a very, very long time ago I would be working on the assumption that youve got a substantial abnormal cost to cover.