It is an inevitable consequence of a difficult economic climate that some developments will falter when only part complete.
Our experience from previous recessions is that, at some point during the economic cycle, these sites will fall in value to a level where they again become commercially attractive. These sites will usually benefit from planning permission (assuming the developer did not start without) and there is potential to capitalise quickly on the return of increasing land values, especially where the construction may be capable of immediate recommencement.
Purchasing a part complete development can give rise to challenging practical and legal issues which must be considered fully, such as:
- Have all necessary approvals been obtained?
- If there are estate roads/common parts, are there management arrangements in place?
- Are the appropriate infrastructure agreements in place?
- Are there warranties available for existing works?
- Is there a suitable licence available to use the intellectual property rights?
- Are there any other construction related risks?