Real Estate and Planning Documents Risk Analysis Can Save Developers Hundreds of Thousands
Just as it is wise to have real estate inspected by specialists before purchasing it, a real estate developer should have a land use, building rights, and risk analysis prepared before acquiring a new property. This way, you can avoid unpleasant surprises – for example, before signing the purchase and sale agreement, it may turn out that the planned volume cannot be built on a specific plot or the land will be subject to compulsory acquisition in the future.
Office building "Bogenhouse" in Laaneveere. Photo by: Wingmacht Development
"We prepare risk analyses of properties and planning documents and help developers of all sizes, construction companies, investors, and landowners work with real estate more consciously. We help analyze development opportunities for potentially suitable land plots and over the years, we have helped our clients save hundreds of thousands of euros," says Vanarc OÜ consultant Ivan Gavrilov. "If a real estate transaction hinges on whether a developer makes or loses hundreds of thousands of euros in profit, a risk analysis costing around 1,000 euros is a drop in the bucket in comparison."
Photo: private collection
The company primarily serves real estate developers who, according to Gavrilov, find themselves in increasingly complex situations year after year as they buy and develop properties. "The problem is that land with building rights in Harju County and Tallinn is running out. Therefore, we have to look at increasingly complex objects located outside densely populated areas, which raise many questions, such as what is the actual building plan for a specific plot and what risks might be associated with it."
He gives an example: "Recently, land was sold in Rae Parish on which, according to a valid old detailed plan, four townhouses could be built. The developer asked us to check the property's background and it turned out that the plot is located within the Rail Baltica corridor and is subject to compulsory acquisition within 5-10 years. This means that no new buildings could have been constructed there and the state would buy it from the owner at market price in the future. The developer's loss would have been very significant."
Another example is from the Tallinn Old Town area, where the state auctioned off attractive residential land on which the master plan allowed building a small apartment building with up to 8 apartments. However, Vanarc OÜ consultants determined that based on the property's area and shape and the load index, only a building with four apartments could actually be built there. This would have meant essentially a project with no profit for the developer. "When such important details go unnoticed, the damage to developers and other interested buyers can be quite significant," notes Gavrilov. "But this is very important information, and this is why entrepreneurs, landowners, and individuals who understand the risk but are unable or don't have time to find all the information themselves from databases turn to us."
Report preparation takes about a week, but the service can also be ordered as rush work – in that case, the report is ready within three working days. The service is offered in Estonian, English, and Russian, and for an additional fee, the final report is available in other languages as well.
Vanarc OÜ services for landowners and developers:
*Analysis of construction possibilities and risks
*Analysis of plans at any level
*Assessment of maximum possible building rights on a development object
*Analysis of environmental area conditions
*Support for initiating detailed plans, including sketches, cooperation with local government, etc.
*Requesting design conditions and technical conditions
*Client representation in processes related to building rights and planning, including public discussions, etc.
Services for developers of strategic development documents (master plans, comprehensive spatial plans, etc.):
*Analysis of settlement development directions
*Development of architectural conditions at the master plan level
Services for real estate appraisers:
*Identification of the best possible use
*Assessment of maximum possible building rights on a development object
Since no two real estate objects are identical, Vanarc OÜ experts approach each order individually. To get more detailed information, feel free to contact us, ask for a quote, or simply get some advice. Call +372 503 1352, write to [email protected], or use the contact form.
Article author: Vanarc OÜ
