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A Practical Guide to Major Property Developments

on Friday, 13 November 2015.

We have all seen the wow factor that accompanies a brand new campus or building.

Students and staff enjoy the environment created by a state of the art facility, accolades can be won, student satisfaction figures can go up and reputation can be enhanced.

However, the afterglow of a successful project is usually preceded by long hours, massive commitment from staff and the odd testing time along the way. Whilst a certain amount of stress is, unfortunately, inevitable, there are a number of things further education colleges can do to minimise the pain of a major development project.

Plan Ahead

Complex projects contain many different strands and even the best managed projects can go awry. The opening of a new facility invariably revolves around the start of an academic year, so you will need to work backwards from there. Good project management will then help you determine whether you have allowed enough time to secure the relevant consents, build out and fit out.

Arrangements where you are selling premises and reinvesting the sale proceeds into paying for a new build can be more tricky, and a missed deadline can have wide-reaching consequences. The key is to build in room for manoeuvre where you can. A delay can have a massive impact on cash flow so affordability should also be assessed regularly.

Check What you Own

This is basic but fundamental. Check the legal boundaries - do you own absolutely everything, including access rights? We have seen instances where a building is within a legal boundary but a canopy overhanging the main entrance fell outside it, or where a new wider development scheme meant a client needed legal rights of access across land it did not actually own. The boundary for the development used in the planning application should also precisely match the legal title. These issues can usually be fixed but invariably take time and money.

Getting Buy In

This works internally across the governance, strategy and financial parameters within which you operate. Make sure you factor in times for executory approvals, and delegated authority outside those meetings. It also means getting the support externally: does the finance stack up with your funders and regulators; is a development likely to go through planning smoothly - an early conversation with advisers but also the planners as part of pre-app discussions will help identify any likely pressure points.

What regulatory consent do you need?

The principal regulatory issues to address are planning, building regulations and listed building consents. However there might be less obvious ones that are driven by your legal title. Development near a boundary might mean you need party wall consent from your neighbour and work in a built up area could mean rights to light need checking.

Can you (legally) do what you want - how you want?

Sadly, the world has become a more litigious place and it is important to make sure that any project is legally watertight. Part of this turns on the planning authority granting a decision that is immune from challenge. However, it might also be a case of making sure that you have procured a contractor and professional team in a legally compliant way, or at least understood the nature of the risks. Usage of sector wide panels is more prevalent but you need to make sure the terms of appointment suit your intended project.

And how are you going to pay for it?

Using your own funds is fine, as is conventional bank finance. Whatever the funding model, you need to ensure the terms of finance are adhered to and to be aware of what might happen in the (unlikely) event of any breach. This is where project planning and cashflow forecasts can be invaluable.

Expect the (Un)expected

In pretty much all major developments, something will happen which might impact upon funding, timing, need for consent or sometimes all three. Whatever the situation, the key is to allow for a sufficient contingency because something will invariably happen; you can expect it.

Keep On Top of the Detail, But Do Not Lose Sight of the Bigger Picture

The ultimate aim should be to develop your new academic, leisure buildings or student accommodation on time and on budget. Good advisers will help you get there and should advise on the risks of doing or not doing things in a certain way.

Have a Good Team and be Organised but also Flexible

You will have an experienced team within your college, a handful of whom will be involved in a major project, but they also have a day job to do. This is where experienced advisers and good project planning comes in. An experienced development lawyer should work with your project managers to ensure the legal documentation is negotiated and settled in timely way, working within the time frames for planning, funding and overall deliverability. Regular project team catch-ups (sometimes even daily at times of great activity) between advisers and the client can help to identify key action points and allow you to adapt quickly with little fuss.

Embarking on a major project is exciting, if a little daunting, and there are plenty of traps for the unwary. However with good planning, good organisation and practical, experienced advisers around you, you can deliver a major development on time and on budget.

For more information on how we can assist you with development projects, please contact a member of our Commercial Property team on 0121 227 3710, or complete the form below.

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