Real estate development

A development is a sequence of commitments made before the thing they concern exists. Land is tied up before a permit is granted, funding is agreed before the costs are known, and the first occupiers sign up while the building is still a set of drawings. Each contract is written with a different party pursuing a different interest, and a gap between two of them — a permit condition the funder never accepted, a handover date the tenant relies on but the contractor is not bound by — lands on the developer.

A development project therefore depends less on any single agreement than on how the agreements fit together, and on who carries which exposure at each stage of the work:

• the rules on options and conditional purchases that secure a site before the project is certain;
• the rules on joint ventures between a landowner and a developer, and on how the profit and the losses are shared between them;
• the rules on the agreements with the local authority, covering roads, utilities or public space, that a project takes on in return for its consent;
• the rules on appointing architects, engineers and project managers, and on the part of the work each one answers for;
• the rules on forward funding, where an investor finances the project in stages against the developer’s progress;
• the rules on pre-letting agreements, which commit a future occupier to a building that has yet to be built;
• the rules on dividing a site or a building into lots that can be sold separately;
• the rules on practical completion, the snagging list and the formal acceptance of the finished works.

Our lawyers can support you with this.