Public open spaces play a crucial role in providing areas for recreation, socialising and contributing to the overall well-being of communities.  Ensuring the efficient management and maintenance of these spaces is essential. Therefore, once a residential development is complete the freehold title to any public open space on the development should be transferred to the appointed management company or the local authority.

How important is it that the land is transferred and how quickly should this be done?

Whether you are a developer or a management company there are various pitfalls you may face if there is a delay in transferring the public open space. Below, we explore the significance of transferring public open spaces to management companies and the possible implications when this crucial step is neglected.

Risks for developers

•  Until the land is transferred to a management company the responsibility for the open space continues to sit with the developer and any costs associated with it.
• Whilst the developer remains as the proprietor they may be faced with the liability for any accidents or damage which occurs on the open space. Public liability should be high on the list of considerations.
• Developers may have contractual obligations to designate and maintain public open spaces within their developments. They may also have a contractual obligation with a management company to legally transfer the title to land. Failing to fulfil these contractual obligations could result in a breach of contract and/or planning obligations.
• Beyond legal consequences, failing to transfer public open spaces to management companies can also result in negative publicity.
• There are also practical considerations. There are commonly restrictions on individual plot titles which require consents to be provided if the property is resold. If the restriction is in favour of the intended management company but the open space continues to be held by the developer this can create delays and frustration for the property owner.
• Any delay in transferring the open space land does not achieve the common aim of a developer, which is to make a clean exit from a development with no ongoing responsibilities.

 Risks for management companies

•  Lack of ownership may restrict the management company's ability to make necessary decisions regarding maintenance, improvements, or development of the managed areas. Once the land has been transferred the management company has a legal standing in order to manage the land.
• It is important that the provisions contained within the transfer deed for each plot on the development are complied with. Any charges due from residents must be collected by the company entitled to collect the sums due at the point the cost is incurred. Any delay in transferring the open space may see residents challenging the management company and the management company not recouping the maintenance costs. 
• A management company must have the legal right to enter onto the open space in order to manage and maintain the areas. This right may not exist until the open space land has been transferred.
• On registering the plot purchase a restriction would usually be entered on to the individual property title to protect the provisions in relation to the collection of any charges due for the management of open space. A property resale prior to the land being transferred to the management company could hinder the sale process, create frustration for the property owner and damage the reputation of the management company.

Top Tip - Entering into a robust management agreement is important. They are designed to protect both the developer and the management company, detailing expectations and obligations of both parties. A well drafted management agreement will assist in maintaining a good relationship between all parties.  

Failing to transfer public open spaces can expose both developers and management companies to preventable risks. Recognising the importance of transferring public open space and proactively entering into the legal transfer as soon as possible at the end of a development is pivotal. It can save all parties unwanted and potentially costly issues in the future.

For expert support and guidance with any aspect of property development, contact us on 01302 320621 or email help@switalskis.com.