How Barr Ellison is proving a vital piece of the property development jigsaw
The process of property development can be thought of as a challenging puzzle - and Cambridge law firm Barr Ellison has built a reputation for helping to solve it.
With clients ranging from developers to promoters and landowners, including University of Cambridge colleges such as King’s, its property team is well-placed to understand the complexities of each individual deal from all sides.
Kelly Peck joined as a partner in January 2021, having previously worked in private practice, as a solicitor for a city council and at a respected regional law firm. She has found the 50-strong team at Barr Ellison to be “close-knit and very friendly”.
“We are located in the heart of the city on Parker’s Piece and on the Biomedical Campus,” she says. “We’re relatively small - but in size only. We don’t suffer from a small firm mentality. We are a nimble, full service law firm. And I believe we’ve got a really good reputation out there.
“Our client base is cemented in Cambridge, although we have clients all over the country, as you go where your clients take you. But we target the
Eastern region.
“There is value in local knowledge and connections. It doesn’t mean you can’t deal with property further afield, but to grow those relationships with clients and agents, it helps to operate in an area you can touch.”
Strong relationships and open communication lines with clients mean Barr Ellison can often get involved early on in the process of a development, even though legal requirements may come later.
“Generally, we’re involved at the stage where a client is looking speculatively for a site to acquire,” notes Kelly. “They might be negotiating the sale of a site they are going to develop and build houses on, or it might be a site they are looking at collaboratively with the landowner because they need planning permission on it.”
In the latter case, options agreements may be drawn up, with prices agreed based on potential outcomes.
“It could be an agreed price once x, y and z has happened, or there could be a calculation to work out what the market price will be – and it may be in seven years’ time that these things happen.
“We do have to have a bit of a crystal ball about us, but the more you work on these kind of transactions, the more you can see the trends and the pitfalls,” says Kelly.
“We can also act for a landowner who has been approached by a developer, or a promoter, which is a hybrid in between the two, connecting landowners and developers, looking after planning and taking a fee. So we get to see this from all angles.
“If a site has been identified for new homes, we might get involved at the heads of terms stage. These are not binding, but they set the tone, so it is useful to be involved then - our input can be invaluable, and we have a heads-up on what is coming.”
Good practice in property development today means working with the community, Kelly stresses.
“Our clients are typically community-focused and development today is collaborative - it has to be. If you have a ‘big bad developer’ trying to develop a site no matter what, it’s simply not going to work.
“We encourage clients to do their feasibility studies at the outset and work with the community. This is where promoters can be useful. They won’t hesitate to find out what a response is likely to be. If there is a real issue - for example, traffic near a school - they will make sure that is addressed.”
Given the importance of strong consultation, and the rigours of the planning system, one trend that cannot be denied is that property development is taking longer.
“Our clients are forward-thinking and acknowledge the longevity in sites. They know they are in it for the next five or 10 years,” says Kelly.
“Costs are a significant issue for everybody but particularly the development sector. Someone may purchase a site, or agree to, but by the time they come to build it out, their margins may be squeezed.”
One welcome trend in the sector is the increasing focus on ensuring homes are environmentally sound.
“That is what consumers want. They may cost a bit more as a result, but it is better in the long-run,” notes Kelly.
From Section 106 agreements to biodiversity targets, there are more considerations than ever, so any decision to invest in a site is a significant one for a developer.
“As legal advisors, we make sure that they have good advice from their accountants, particularly when it comes to tax and stamp duty land tax. We also work with the architects to make sure a scheme is viable.
“If a planning consultant advises that they can only build seven units instead of 10, for example, they need to check it is financially sound. Ultimately, it’s the client’s decision whether they go forward, but we are part of the team. And that is what I think we like most about property development. We play a key role, but so does everyone else. I always think it is like a jigsaw puzzle, putting all those pieces together to get to the end. It’s about drawing on everyone’s expertise.”
In one recent case, Barr Ellison rescued a deal where the relationship between the landowner and option holder had deteriorated - a hazard that can occur when a party grows tired of waiting for the wheels of planning to turn. In this case, the landowner was no longer engaging after a four-year period of investment from the developer.
“With a huge dose of diplomacy and some new proposals put forward, we were able to get the deal back on and completed,” says Kelly.
In addition to diplomacy, Barr Ellison’s expertise extends across residential and commercial property, with services for landlords and tenants, farms and estates and the education sector, for example. It also acts for many GP practices on their properties, and it has a personal wealth team.
It has a family and divorce team, a personal injury team and offers a full set of services for companies.
Visit barrellison.co.uk.
Case study 1
Barr Ellison acted on the sale of a residential development site subject to a Homes England restriction that could not be lifted in the time available and would have triggered a clawback payment for the seller.
“Instead of selling the affected part, which was primarily for open space, we suggested that the seller retain the affected part and grant rights over the restricted part instead.
“This avoided delay, facilitated development and got the deal over the line with a licence to occupy, and a limited deed of covenant in place to enable implementation of the planning and Section 106 obligations,” says Kelly.
Case study 2
While property development itself is not a quick process, time can be of the essence during it.
In one recent case, the team acted for a developer who was in a contract race to purchase a site with a gross development value of £15million.
“We were under pressure to act quickly, but with a focus on the key issues and a bespoke search indemnity policy, we turned the deal around to be in a position to exchange within three weeks. We had a very satisfied client!” says Kelly.
Headline sponsor of the Cambridge Independent SME Cambridgeshire Business Awards 2022
Barr Ellison is headline sponsor for the second year running of the Cambridge Independent SME Cambridgeshire Business Awards.
It is sponsoring the Property Industry Business of the Year, along with the Service Excellence category.
“It was great to be involved last year, and we’re really pleased to be back,” says Kelly.
Also sponsoring the awards are Mattioli Woods, Milton Hall, Barons BMW Cambridge, Ilux, Growth Works UK and The Cambridge Building Society.
See a full list of the nominees here, or to find out more about the black-tie ceremony, being held at Cambridge Country Club in Bourn on October 13, visit cambridgeshireawards.co.uk.
