Legal matters for care home operators purchasing land for the construction of a new service

When care home operators purchase land for the construction of a new care home it is important to be aware of the types of agreement to consider when buying a development site.

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Legal matters for care home operators purchasing land for the construction of a new service

When care home operators purchase land for the construction of a new care home it is important to be aware of the types of agreement to consider when buying a development site.

Are you are looking to expand your care home business but cannot find a suitable existing building? You may be considering the purchase of a plot of land to construct one from scratch.

There are many issues to consider when buying land for development. Including ways to access the site, drainage, boundaries, planning consent, collateral warranties and restrictive covenants. This would prohibit or hinder the proposed development.”

Keep in mind different property agreement options

An option to purchase is an agreement in which a landowner would grant you the right to purchase land within a specified time-frame. During this period, you can decide whether or not you want to commit to buying the land or property.

An option agreement is registrable at the Land Registry. Providing protection if the landowner sells the land to a third party.

Another type of agreement is a pre-emption agreement. This is where the landowner has to offer to sell you the property to you within a specified timeframe before they are able to sell it to anyone else. A right of pre-emption is also called a right of first refusal. As it requires the landowner to give first refusal to the owner of the pre-emption right.

A conditional contract is similar in that you would not be bound to purchase a piece of land. That is until certain conditions are satisfied. Typically, such a condition might be you obtaining satisfactory planning permission for your proposed development of the land. Once planning permission is obtained, then the purchase of the land will proceed on the terms set out in the conditional contract. If it is not obtained, then you would not be obliged to proceed with buying the land.

Care must be given when defining the conditions of such an agreement. Otherwise, you might find yourself lumbered with a property and planning permission. This would make either the construction or the operation of the new care home economically unviable or impracticable.

Each of the agreements are advantageous to a developer. They both provide a degree of flexibility when considering the purchase of a plot of land.

The important distinction is that under an option to purchase, you would have an absolute discretion as to whether to go ahead with buying the land, whereas under a conditional contract, you would be bound to complete a purchase once the conditions of the contract are met.

If you have any questions about legal matters for care homes, please contact Charlotte Harris at charlotte.harris@keebles.com or call Charlotte on 0114 252 1464

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