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Publish date

15 February 2021

Smoothing the Process – Reliance Letters

As we know, the devil is in the detail, and ensuring that the sale of a site with the benefit of planning permission is not delayed by matters ancillary to the main transaction is just as important as progressing the main transaction itself.

Landowners should ensure that, when appointing consultants to progress planning on a property whose reports an incoming buyer is likely to require reliance upon, they keep to hand a copy of the report, a copy of the consultant’s appointment, and a copy of the consultant’s PI insurance certificate so that these can be issued promptly to an incoming buyer.

Landowners should also ensure that the consultant’s letter of appointment states that the landowner may require letters of reliance be issued to an incoming buyer of the whole of the site in relation to which the consultant’s report was prepared. Ideally, the letter of reliance should be assignable to a third party by an incoming buyer and include an obligation to provide, at the direction of the recipient of the letter of reliance (and preferably at no cost), a further reliance letter in the same form to an incoming purchaser of part of the site.

This will ensure that the recipient of the letter of reliance and any incoming purchaser of part can both rely on the contents of the consultant’s report in respect of which reliance is being provided.

This is particularly helpful on large sites where multiple developers will be buying sections of the site for development. In default of the above, landowners and developers may find themselves having to make contact with the consultants (sometimes years later) and facing the cost of obtaining letters of reliance from their consultants as well as the inevitable delays negotiating these letters are likely to entail.

If you have any questions about this topic, please get in touch

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