Real Estate: Land Assemblies
A land assembly refers to the joining of adjacent lots to make a larger parcel. With a constant decrease in the availability of developable land in the lower mainland, many municipalities and developers are now looking to redevelop and increase density in what were traditionally low density single family home communities.
In Vancouver, land assemblies often occur along major transportation corridors. They are often initiated by adjacent property owners deciding to market their properties for sale all together, although at times a developer may approach a group of property owners and offer to buy all the properties. By selling a property as part of a land assembly, owners are able to demand a higher purchase price since their individual property is worth more to a developer when combined with adjacent properties.
With all land assemblies, consideration needs to be given to the following items:
- Intention of all parties in the land assembly to sell;
- Whether all properties in the land assembly will be treated equally, or if there are special characteristics of some properties that warrant special treatment, such as a corner lot;
- Formula to determine purchase price of each lot;
- Whether any of the sellers have specific needs, such as a tenanted property;
- The Official Community Plan for the area; and
- Whether the land assembly would be viable for redevelopment and therefore attractive to a potential buyer.
Land assemblies differ from traditional property sales, in that they are often contingent on having all the properties in the assembly enter into binding contracts. Additionally, the timelines for land assemblies are often extended, meaning from the time of signing a contract to removal of subject conditions to the completion date, can be several months and even years. Due to this extended timeline, there are generally a number of deposits given throughout the process. Consideration must be given to the amount of time a property is tied up by the contract before the subject conditions are removed, since there is no guarantee the transfer will complete until subjects are removed.
Bell Alliance offers legal representation to both buyers and sellers of land assemblies. We are able to guide clients through the process to ensure the transaction unfolds as painlessly as possible.