Developers offer on my property

TripleH

To clarify, they are offering to pay you £100,000 a year for 5 years plus if they get planning permission, they will the pay you the difference up to double the value of your property?

How will you find alternative housing as you would get a '£100,000 deposit' but could you afford the difference to get an appropriate mortgage?

If you have more than £100,000 equity currently this might not be a great deal as you would incur extra costs on buying a new home (irrespective of everything else).

What if the developer goes bust and you then end up as one of many creditors?

I've not considered whether the package offered is good or not as outside my scope, just on other points to consider.

JReacher1

How much is your house worth? £100k, plus double your house value seems a decent price really. 

Sometimes people get too greedy and they’ll find another solution (which there always is). 

TripleH

If your equity is higher, I'd go for a higher initial lump sum to cover that but maybe offer 6 years total repayment?

Section62

babyblade41 said:

If this is an affordable housing scheme backed by the council, would there be a possibility to compulsory purchase your property ?

I would get some advice but as @Gavin83 you could end up with  a much de-valued house 

This^ and Gavin83's point.

If the local authority want the scheme to go ahead (and it doesn't have to include affordable housing either) then they could use powers of compulsory purchase to acquire the land needed to create a new road serving the development.

In that situation the land they acquire would probably be at market value (as determined by the DV if disputed).

They also have the option of only acquiring the land they need for the access, they won't necessarily have to buy the entire plot (including any buildings), depending on the layout.

This is a situation where getting advice from a solicitor and someone like a chartered surveyor or land agent would be wise.  It would be very easy to overplay your hand.

london21

Why not get the house valued to know if you are getting a fair deal. 

wilfred30

I'm also confused by the layout.

Couldn't the farmer just create a road leading to the development in his own field to the side of your house?

Would it be possible for you to post a sketch showing the farmer's fields, the narrow access strip, your house and any other houses around?

ProDave

If I am understanding the offer correctly, they are going to pay you £100K NOW for a 5 year option to buy the house, and if they exercise that option it will be for double it's market value.

IF you can be sure you will be able to buy another suitable property for the proceeds of that then personally I would accept. this to me is their "sensible" option having had their earlier silly offer rejected.

You need to check the detail, i.e. if they don't get planning and don't exercise the option, you still get to keep the £100K

Kinada66

ProDave said:

If I am understanding the offer correctly, they are going to pay you £100K NOW for a 5 year option to buy the house, and if they exercise that option it will be for double it's market value.

IF you can be sure you will be able to buy another suitable property for the proceeds of that then personally I would accept. this to me is their "sensible" option having had their earlier silly offer rejected.

You need to check the detail, i.e. if they don't get planning and don't exercise the option, you still get to keep the £100K

You are correct... and the 100k would be ours to keep if planning is not granted or option excersised 

Section62

TripleH said:

To clarify, they are offering to pay you £100,000 a year for 5 years plus if they get planning permission, they will the pay you the difference up to double the value of your property?

...

What if the developer goes bust and you then end up as one of many creditors?

What you'd normally expect on a deal like this is the £100k paid up front and non-returnable. (and being a one-off).  Effectively they are just purchasing the right of first refusal for a defined period.

Within the 5 year option period they can choose to buy the property.  You'd normally expect the terms to give the seller a certain period of time from the decision to buy to them having to move out.

At the end of the 5 years - depending on the terms of the agreement - the developer may be able to buy a further period of time for an additional payment.

If the developer goes bust then the seller isn't a creditor (as they should already have their £100k).  However, the option to buy won't be extinguished (unless the agreement says so) and instead becomes an asset of the insolvent company - with (subject to the agreement allowing it) the potential for someone else to buy the right.

The detailed terms of the agreement could vary from this though... and it needs checking very carefully by a very competent solicitor.  E.g. is 'Market value' based on the date of the agreement, or on the actual sale?

Section62

Kinada66 said:

You are correct... and the 100k would be ours to keep if planning is not granted or option excersised 

If you like the area and wouldn't want to move far away, then consider asking for a plot of land on the development to be included in the deal - optionally with the developer building for you, or you using the cash to build your own home the way you want it.  In the latter case the developer may want conditions giving them some control over what you build and when (i.e. to avoid an eyesore on their pristine estate)