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What happens if the land and house in separate ownership

Land, Registered Land, Planning law etc.

What happens if the land and house in separate ownership

Postby mawallace » Sun Nov 06, 2016 12:17 pm

The land is owned by me.

I have asked a builder to build a house, and for the house to be sold to another person when built.

Am I correct:-

i. Unless there is a written agreement the house actually belongs to the landowner (me) as it is a fixture on my land. What do we have to do to regularise the position? How much should I expect a builder to pay for the right to build on my land?

ii. The intention was that I would sell the land on which the house stands and the building company sell the house to the end user. Is it possible? Should it be one transaction?
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Re: What happens if the land and house in separate ownershi

Postby atticus » Sun Nov 06, 2016 1:49 pm

This is barking. The land is sold with the house on it.
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Re: What happens if the land and house in separate ownershi

Postby dls » Sun Nov 06, 2016 6:33 pm

This does not look like an arrangement which should be left as it is. We have not seen the contracts so do not know just what provisions are made, but it makes something unnecessarily complicated and risky.
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Re: What happens if the land and house in separate ownershi

Postby tph » Sun Nov 06, 2016 11:03 pm

There should be a separate contract between you and the builder which outlines the agreement.

It is possible for the land to be directly transferred from you to the new purchaser. I assume the builder does not want to buy the land directly from you prior to the sale of the new property.
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Re: What happens if the land and house in separate ownershi

Postby theycantdothat » Mon Nov 07, 2016 10:58 am

If X owns land and enters into a building contract with Y for Y to build a house on it, then the house belongs to X. All Y owns is the right to be paid. In practice no sensible builder builds a whole house before collecting any money. Payment is made at agreed stages of construction.

If X owns land and enters into some sort of joint venture with Y which involves Y building a house and Y builds the house, the house "belongs" to X in the sense that he is the legal owner of both house and land, that is the person with power to convey it to a buyer. However, Y will have some sort of equitable interest in the property (that is both land and house). Precisely what the interest is and how it can be protected depends on the arrangement.

In practice what often happens is that X agrees to sell the land to Y, but completion is delayed until the house is built and a buyer is ready to complete the purchase of the property. On completion X conveys the property to the buyer, but Y joins in to receive his proportion of the sale price.

Whilst in theory possible, what never happens is that X would own the land and Y the house. That could only be achieved by X conveying the space to be occupied by the house to Y and the complications involved in doing that do not bear contemplation.
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Re: What happens if the land and house in separate ownershi

Postby diy » Tue Jun 20, 2017 1:45 pm

This may be an attempt to avoid stamp duty. Selling the land and house below cut offs, perhaps?
My suggestions are not legal advice
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Re: What happens if the land and house in separate ownershi

Postby atticus » Tue Jun 20, 2017 1:58 pm

All parties would have to certify that the individual transaction is not part of a larger set of linked transactions, so that seems unlikely.
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