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A ransom strip is a small parcel of land whose ownership has been retained, often by a previous owner when a larger or adjoining portion of land has been sold. Typically, it runs alongside the boundary between more than one parcel of private land, or between private land and the public highway.
Owning a ransom strip can be beneficial because of its strategic location, which can be used to restrict development of the adjoining land until an agreement has been reached to either purchase the plot or negotiate rights of access across or beneath it. This means that you can charge the developer for its use, which can lead to a substantial monetary windfall.
Creating a Ransom Strip
If you have a plot of land you are thinking of selling, and there is potential for any adjoining land to be developed in the future, you could consider creating a ransom strip. Retaining ownership of a small section of land along boundaries that may form access to, or for the installation and supply of essential services to the site, will require the developer to agree terms for use in return for payment.
Importance of Registration
It is essential to make the developer aware of the existence of the ransom strip, so it is not overlooked, and ensure they know who to contact to begin the process of negotiating a financial settlement. If the developer is unaware of the existence of the strip, or is aware, but does not know who to contact, the burden passes to the subsequent owner to seek compensation for rights that have been unlawfully exercised. This can be particularly onerous to obtain after the event because the impetus for reaching an agreement in short time has been lost. If the land is not registered with Land Registry, registering the land is important to evidence ownership and the existence of the ransom strip.
Arguably, the smaller the strip, the greater the importance of registration as it can easily be lost through adverse possession, commonly known as 'squatter's rights.' This is where land owned by another is used or possessed continuously for a set period of time. Examples include continuous use of a private road or driveway, or agricultural development of an unused parcel of land.
If the land is unregistered, you can voluntarily apply for first registration, which will ensure you cannot lose ownership without your knowledge and therefore giving you to opportunity to prevent it.
How much is a Ransom Strip worth?
Calculating payments for access over a ransom strip follows a particularly complicated process, and each figure reached depends on several factors surrounding case law. It is best to obtain specialist advice in order to determine an accurate value.
It is sensible to obtain specialist advice from an experienced surveyor.You should expect the developer to meet all your costs for entering into an agreement, regardless of whether the negotiations are successful or whether planning permission is obtained. If the developer is unwilling to pay your costs, because they fear planning permission will be refused, then they should gain permission and return to continue negotiations for access with you.
How we can help?
Whether you are thinking about creating a ransom strip or you have been approached by developers or a subsequent owner and want to know more about how one can work to your advantage, contact our team who can provide expert advice and assistance by checking whether your ransom strip is registered, and your details are correctly recorded, or registering a 'property alert' against the property. This way if a developer seeks to register a right over the land, the Land Registry will issue a notification to you, putting you in a beneficial position when you receive an approach from a developer.
Pinney Talfourd are experts in residential property litigation and can advise you on changes to the law so you are given up to date advice.
This article was written by Oliver-James Topping, Solicitor in our Residential Property Litigation Team. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of February2021.