02 Oct 2022

Ask Jackie: Buying a site for a potential new home pending the receipt of planning permission

Jackie White

We intend on applying for full planning permission, but we are worried the seller of the site could change their mind if we receive said planning. What can we do to prevent the seller from changing their mind as we will have a substantial amount of money spent on the planning process?

If you have already purchased the site (i.e., signed contracts, paid the full purchase price, and completed the transaction), then the property is yours. The person who sold it to you cannot change their mind no matter the result of any planning process.

The problem for you in this situation is if you are unable to obtain planning permission or you are granted permission on terms that do not suit you. You are left owning a site that you are unable to develop for the purpose you had intended.

If, on the other hand, you are simply "sale agreed" and have not yet purchased the property, then you should instruct your solicitor to negotiate a condition in the contract which is "subject to planning permission".

In this situation, you will be required to sign contracts and pay a deposit of 10 per cent of the purchase price. The vendor will also sign the contracts and depending on what time frame is agreed in the planning permission clause of the contract, you will be afforded a period within which to apply for and obtain planning permission. It is not unusual to see a time frame of six months being allowed in these conditions.

Once your planning permission is granted on terms you are satisfied with, you then proceed to complete the purchase of the property by paying the remainder of the purchase price and taking ownership of the property.

If planning permission is refused, the contract is rescinded and your deposit is returned to you. This type of contract protects you against the seller changing their mind. It is important to make sure you have a binding contract in place before you incur the expense of making your planning application.

You should inform the solicitor representing you in the transaction of your concerns and intention to apply for planning permission so that the appropriate conditions can be incorporated into your contract for sale.

Jackie White is the owner of Raymond White Auctioneering, Ballymahon. Email: Tel: 087 133 4099.

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