What is a ransom strip?
A ransom strip is a small piece of land that has been retained often by a previous owner when a larger or adjoining portion of land has been sold. A ransom strip is so called as it is essential for access or services to land intended for development. Often a ransom strip will be held back and not controlled or owned by the buyer of the development land. The ransom strip usually continues to be owned by the original landowner who may then use it to controls aspect of any future development.
Typically, the ransom strip runs alongside the boundaries between more than one parcel of private land or between private and public land.
Very rarely can a ransom strip owner be compelled to allow the use of the ransom strip and so a ransom strip can become very valuable especially if it has any of the following characteristics:
• It is adjacent to the public highway so is suitable for good quality access to the development land.
• It is the only suitable access available to the development land.
• It is suitable for use by utility providers to access the development land.
The essential ingredient that makes a piece of land a ransom strip is the ability of the owner to grant or withhold the development of land by someone else.
Spotting a ransom strip
If land is registered at the land registry the title documentation may reveal a ransom strip, but it is always sensible to conduct a site visit to determine precise boundaries so that a ransom strip is identified early and before the purchase of the land the strip might affect.
What can be done about a ransom strip?
It might be possible to negotiate with the owner so that the land to be purchased or sold is released from any constraints created by the ransom strip. Early negotiations are always preferable, and any likely expense can then be taken into account in determining value of the land to be sold or purchased and if appropriate any future development costs.
In exceptional situations public bodies might issue a compulsory purchase order forcing the owner a ransom strip to sell at a ‘fair and reasonable’ level of compensation.
When selling or buying any land careful consideration should be given to the possibility of future development and whether the existence of a of a ransom strip might enhance or detract from the value of the land. The value of the ransom strip is usually far greater than the value of the piece of land, in isolation. Investment in professional advice from land agents, surveyors and solicitors is certainly worthwhile in determining the implications of a of a ransom strip.
PardoesSolicitors