Sale Subject to Planning

Buteo Buteo

Apologies in advance if this is in the wrong place.

What does "sale subject to planning" mean?

“Subject to planning” – is the seller of a property responsible for any of the costs if a planning application is submitted by a developer?

Homer

Is it a new build or a second hand house? You may have difficulty getting a loan against any property that has that clause. In theory the only person that can apply for planning is the property owner?

Gumbo

Buteo Buteo wrote: »

Apologies in advance if this is in the wrong place.

What does "sale subject to planning" mean?

“Subject to planning” – is the seller of a property responsible for any of the costs if a planning application is submitted by a developer?

Some context required.

For example, I may have a big side garden that I think I can sell. But I can’t aell to someone on the risk that planning will be o gained as it’s worthless if planning is refused.

So in essence, I agree a price with joe bloggs. He goes and apples for planning at his expense and if granted he pays me for the site.

sea12

Homer wrote: »

In theory the only person that can apply for planning is the property owner?

Incorrect. Anyone can apply for permission on someone land once they have the owners consent. Required in writing as part of the application.

Buteo Buteo

Thank you all for your responses.

So the buyer gets planning permission and pays all costs of same? The seller doesn't have to pay any costs of planning?

BryanF

Buteo Buteo wrote: »

Thank you all for your responses.

So the buyer gets planning permission and pays all costs of same? The seller doesn't have to pay any costs of planning?

Yes

Gumbo

Buteo Buteo wrote: »

Thank you all for your responses.

So the buyer gets planning permission and pays all costs of same? The seller doesn't have to pay any costs of planning?

Again, subject to agreement between the 2 parties. Nothing stopping the seller paying or vice versa.

Buteo Buteo

Thank you all for your responses.

So, basically in a "Sale subject to planning" situation, the vendor agrees a price with the buyer by means of a written contract (?)

The contract states that the buyer will pay the vendor X euro for the property on condition that the buyer applies for and is granted planning permission ?

If the buyer fails to get planning permission, the sale falls through and the buyer is not liable to pay the vendor anything ?

So, the benefit to the vendor is that they avoid the hassle and expense of getting planning permission themselves while guaranteeing a fixed price should planning permission be granted to the buyer.

The benefit to the buyer is that they get an agreed fixed price they will pay which the vendor cannot then increase ?

Sorry. I'm just trying to get this clear in my own head.

Gumbo

Buteo Buteo wrote: »

Thank you all for your responses.

So, basically in a "Sale subject to planning" situation, the vendor agrees a price with the buyer by means of a written contract (?)

The contract states that the buyer will pay the vendor X euro for the property on condition that the buyer applies for and is granted planning permission ?

If the buyer fails to get planning permission, the sale falls through and the buyer is not liable to pay the vendor anything ?

So, the benefit to the vendor is that they avoid the hassle and expense of getting planning permission themselves while guaranteeing a fixed price should planning permission be granted to the buyer.

The benefit to the buyer is that they get an agreed fixed price they will pay which the vendor cannot then increase ?

Sorry. I'm just trying to get this clear in my own head.

Sounds about right to me.
If you were to invest the money into planning, then the value of the land could possible double.

Buteo Buteo

kceire wrote: »

Sounds about right to me.
If you were to invest the money into planning, then the value of the land could possible double.

I'm not sure if it is in our capacity to get planning ourselves. It seems to be a long and expensive process. From what I hear, you need to engage a number of different people, and they would only get paid when the land would be sold.

Sale subject to planning means that you will buy for x IF you’re lucky enough to get planning. That planning may be to renovate an existing property or to build on a site. It’s up to you as buyer to apply (with sellers consent, terms regarding timeframe) for the planning that YOU need. It’s really nothing to do with the seller what you need planning for. If the sale is dependent on you receiving planning and you cannot afford it, then you’re not in a position to proceed with the development, so for everyone’s sake, you’re best taking a step back.

It’s actually a safety measure. Say, you’re going to pay €50,000 for a site and fail to get planning, that’s a very expensive field you’ve got.

Buteo Buteo

Deleted User wrote: »

Sale subject to planning means that you will buy for x IF you’re lucky enough to get planning. That planning may be to renovate an existing property or to build on a site. It’s up to you as buyer to apply (with sellers consent, terms regarding timeframe) for the planning that YOU need. It’s really nothing to do with the seller what you need planning for. If the sale is dependent on you receiving planning and you cannot afford it, then you’re not in a position to proceed with the development, so for everyone’s sake, you’re best taking a step back.

It’s actually a safety measure. Say, you’re going to pay €50,000 for a site and fail to get planning, that’s a very expensive field you’ve got.

Thanks for that. I should've clarified at the start that we are the sellers (owners) of the property. It's a greenfield site rezoned for residential development. So, as owners we should take a step back and agree with the buyer that they get and pay for the planning?

Buteo Buteo

Buteo Buteo wrote: »

Thanks for that. I should've clarified at the start that we are the sellers (owners) of the property. It's a greenfield site rezoned for residential development. So, as owners we should take a step back and agree with the buyer that they get and pay for the planning?

Yes. But put a time limit on it. Your solicitor would be used to this and can suggest a reasonable timeframe.

Buteo Buteo

Would I be right in thinking that it would make more sense for the buyer to get planning to their own specifications, as opposed to the seller getting planning and ending up with something which the buyer might not be happy with, or does it matter either way?

What is the norm in this situation: that it is the buyer who gets and pays for the planning?

Buteo Buteo

Deleted User wrote: »

Yes. But put a time limit on it. Your solicitor would be used to this and can suggest a reasonable timeframe.

Thanks for that. That sounds like a more attractive prospect than having to tell the planning consultant, engineer, etc. that they will only get paid when the land is sold.

Bear in mind that you, as seller, will only get to close the sale once the buyer gets planning permission.

JoeA3

Buteo Buteo wrote: »

Would I be right in thinking that it would make more sense for the buyer to get planning to their own specifications, as opposed to the seller getting planning and ending up with something which the buyer might not be happy with, or does it matter either way?

What is the norm in this situation: that it is the buyer who gets and pays for the planning?

Typically - The buyer applies and pays for all the fees relating to getting planning. The buyer, with the aid of an engineer/architect will design a house to suit their own needs.

Is the site subject to “local need” type restrictions? That typically reduces your market quite a lot.

Buteo Buteo

Deleted User wrote: »

Bear in mind that you, as seller, will only get to close the sale once the buyer gets planning permission.

That makes sense. Thanks.

Buteo Buteo

JoeA3 wrote: »

Typically - The buyer applies and pays for all the fees relating to getting planning. The buyer, with the aid of an engineer/architect will design a house to suit their own needs.

Is the site subject to “local need” type restrictions? That typically reduces your market quite a lot.

It's a greenfield site, zoned for a density of between 20 and 50 houses per hectare.

Do you mean local amenity/recreation/green space? It doesn't have any restrictions in that sense.

Buteo Buteo

Is there anything else we should be aware of before we put the land up for sale subject to planning? Any problems or pitfalls that might arise?

How would it be marketed? "For sale subject to planning"?

JoeA3

Buteo Buteo wrote: »

It's a greenfield site, zoned for a density of between 20 and 50 houses per hectare.

Do you mean local amenity/recreation/green space? It doesn't have any restrictions in that sense.

No I was talking more about the case of a one-off rural house, where there’s very often a local housing need restriction - I.e. the applicant needs to prove a connection to the locality. I don’t think this is relevant in your case, sounds like it would be more of a housing estate type development?

Gumbo

Buteo Buteo wrote: »

It's a greenfield site, zoned for a density of between 20 and 50 houses per hectare.

Do you mean local amenity/recreation/green space? It doesn't have any restrictions in that sense.

This is slightly different then. You need to have a chat with your estate agent as this has been done many many times, so there’s a tried and trusted method out there.

Buteo Buteo

JoeA3 wrote: »

No I was talking more about the case of a one-off rural house, where there’s very often a local housing need restriction - I.e. the applicant needs to prove a connection to the locality. I don’t think this is relevant in your case, sounds like it would be more of a housing estate type development?

Yes, a housing estate type of development.

Buteo Buteo

kceire wrote: »

This is slightly different then. You need to have a chat with your estate agent as this has been done many many times, so there’s a tried and trusted method out there.

Ok. Thanks.

Buteo Buteo

Are there any reliable and impartial sources of information on planning? Books, websites etc.?

Gumbo

Buteo Buteo wrote: »

Are there any reliable and impartial sources of information on planning? Books, websites etc.?

Not for what your looking for in my opinion.
You can read all the regulations and and all the acts u til the cows come home but experience and interpretation can’t be read in a book.

In saying that, just google the Planning and Development Act.

db

One other aspect of this is if you enter a contract to buy subject to planning and permission is granted you cannot back out of the contract. Be sure that you will be able to build whatever you get planning for.

mickdw

To be honest, you need professional advice from the start on this as I assume there is significant money involved.