Sell the land
Advantages
- Successful sale transaction would provide quick profit with very little risk
- Would require no further work from the client
Dis-advantages
- Buyer would have full control of the site, namely, when to start and finish construction works, phasing, density of housing, size / scale / style of housing that could impact future value to adjoining land and /or existing nearby dwellings
- Limits the financial opportunity and profit to land sale price minus design and planning fees
- Potential restrictions posed on future access to any adjoining land
- Client would not gain experience in the house building market
Procure a main-contractor
Land Owner/ Developer could retain control of the site and appoint a single main-contractor to undertake the construction works
Advantages
- Retain control of the site including planning reserved matters, start/finish dates, design and layout of the site and dwellings
- Only one contractor to manage who takes responsibility for down-stream supply chain, sub-contract design and purchasing of materials
- Main-contractor appointment transfers the majority of CDM duties from client to contractor
- Reduced workload for the client
- Retain control of the marketing and sale of the properties
Dis-advantages
- Main-contractors typical build costs, including covering their overheads, prelims, risk and profit, reduces the financial opportunity / profit for the client
- Clients would still be advised to pay for a ‘client-side’ professional team to manage the main-contractor, including responding to clarifications, defending against variations, making payments, managing overall development commercial model, issuing and administering of the main-contract, checking and monitoring that main-contractors’ duties are being upheld
- Very rigid payment process could put additional pressure on development finance process and/ or cashflow
- Client delays or changes could become expensive as the main-contractor will look to recover any incurred costs such as overheads and prelims to the client and/or charge for acceleration costs to maintain programme
Self-delivery with BM Consulting
Clients / Developers / Land-owners can act as the Principal Developer, Contractor, and Designer with full professional support from BM Consulting. We will effectively project manage the scheme on your behalf, ensuring your compliance with CDM/HSE, all sub-contract liaison (obtaining quotes, raising orders, completing valuations, and controlling cost/quality) and all design coordination in the same way a main-contractor would
Advantages
- Maximises financial opportunities and profit by reducing build costs. No main-contractor overheads, risk, and profit to cover
- Retain full control of the site, namely, when to start and finish construction works (subject to planning), phasing, density of housing, size / scale / style of housing that could maximise future value to adjoining land and any nearby dwellings
- No restrictions posed on future access to any adjoining land
- No duplication in professional fees having to pay a main-contractor plus fees to retain ‘client side’ professional team
- Client would gain house building development experience, establish a professional team and create a brand in the house building market
Disadvantages
- Client retains ultimate liability for CDM duties (health and safety obligations)
- Client retains more financial risk associated with developing a housing site including but not limited to variations in house prices, variations in build costs and legislation, costs attributed to defects / snagging and poor contractor performance
- More involvement and work required by the client throughout
Want to know more about your options?
Get in touch with the team today to find out how we can help you with your next project. Use the our contact form, or send us an email directly.
