Submit Planning Application before purchase completion?

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    Submit Planning Application before purchase completion?

    My partner and I are in the process of buying our first property, we would like to develop the property into two self contained flats, living in one, and renting out the other.

    We have had an offer accepted and the mortgage is currently being processed, and contracts drawn up, but we still are probably a couple of months off completion.

    We already have our planning application almost ready to go, but the question is, is it possible it could affect the sale if we submit our application before completion? They would have to inform the vendor of our application as we aren't the current owners. We would really like to get the application in now so we can start work on the property with the minimum delay after completion, but at the same time don't want to jeopardize the sale.

    Any advice would be greatly appreciated.

    #2
    You (a) either need to have been the sole owner for at least 21 days before submitting the planning application, or (b) you need to give notice to all owners before submitting the application if (a) doesn't apply.

    You can submit planning applications to any property whether it belongs to you or not - funny thing and I didn't know this myself until recently. On this basis it wouldn't affect your sale - but remember, if for any reason the sale falls through and you have already lodged a planning application then the eventual new owner could simply do what you proposed and has saved themselves the hassle of getting consent.

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      #3
      Yes you need to serve a notice on the current owners. But why not just negotiate it so that they know what's happening?

      Peter

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        #4
        Once contracts are exchanged then is the time to submit the planning application.

        Any sooner than exchange of contracts and the seller may realise that he/she did not fully comprehend the true value of the property and decide to re-advertise the property at a higher price based on the type of development that can be envisaged by someone with more imagination that a poorly informed seller.

        Spotting the future potential of property that does not reflect that potential in the asking price was always the successful way of buying and developing property.

        Tipping one's hand prior to exchange would be really silly.

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          #5
          ... unless you have a valid option to purchase the plot, pending the outcome of the planning application, of course.

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            #6
            My partner and I are in the process of buying our first property
            Which is why Mattl and I are offering advice gained from successfully buying property for development.
            Either buy an option to purchase at a fixed price, or wait until contracts are exchanged before submitting any planning application whereby you do have to inform the seller about such an application.

            Do not let the seller know you have spotted an opportunity they have missed until it is too late for them to back out of a sale.

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              #7
              Thanks for all the advice. So the consensus would appear to be that we should wait until we have exchanged contracts, but should we not wait until completion to be doubly sure?

              How do we get around the fact that we have to have been the owner for 21 days as stated by mattl? Do we have to let the old owners know about the application if we apply after completion even though they no longer own it? That would seem strange!

              Not sure you mean Pilman by "Either buy an option to purchase at a fixed price, or wait until contracts are exchanged before submitting any planning application whereby you do have to inform the seller about such an application."

              How do you buy an option? Do you mean "do not" have to inform the seller?

              Many thanks again for the advice.

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                #8
                Just to clarify what happens when a developer wants to buy property that may have development potential, an Option is a simple legal agreement that the seller will accept an agreed sale price as long as the person buying the option will confirm within a period of time set out in the option that they will execute the option.

                Normally a sum of money is paid to buy the option, so that for example the purchase/sale price is fixed at £200,000 if the option is executed within three months of the date that the option is signed by the two parties.
                Then if a planning application is immediately made and is successfully granted within that three month period, the person wanting to buy the property knows that they can proceed to completion by confirming in writing that they wish to exercise the option at the agreed price.
                That is the equivalent of "exchange of contracts" with completion normally set for 28 days after the option is executed.

                As for the last question about making a planning application immediately after exchange of contracts, the applicant does need to inform the seller that the application has been made, but the contract cannot be broken without legal consequences, so the buyer is then protected if it becomes apparant to the seller that they may have underestimated the true value of the property.

                As you are a first time buyer, the option approach is probably not really suitable unless you would not want to buy the property unless planning permission is given for what you want to develop.
                If the property is worth the asking price even if planning is not obtained that is when waiting until contracts are exchanged makes sense.

                Developers work on the theory that buying an option for however much they need to pay for that legal agreement is worth it if they can afford to walk away from the deal if planning is not granted.
                That is probably not something a first time buyer needs to consider unless the option can by bought for £100, rather than several thousand pounds.

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                  #9
                  Thanks, that's much clearer now. A great introduction to the forum, quick and informed responses, thanks guys, I will certainly be back here again in future as the project progresses!

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