A land assembly is the joining of multiple adjacent parcels of land to form a single site that can be used to construct a larger property. Because vacant land is scarce in urban areas, land assembly is a key tool for developers looking to build bigger and more dense properties.

 

Most people, associate land assembly with high-rise condo projects. That’s a fair association, but land assemblies also includes projects like residential subdivisions, townhouse sites and lowrise sites amongst others.

 

How does land assembly work?
Usually, a developer approaches the owners in the block they want to build on and makes each owner an offer, often for well above their property’s value. A group of property owners can also agree to approach a developer and market all their properties together.

 

As land price is at a premium in cities, property owners with houses grouped together can demand much higher prices than they could by selling individually. Any contiguous group of properties can become part of a land assembly, but most often land assemblies include properties along or near a major transport conduit.

 

Older districts with single-family homes are a prime location for this kind of development. 

 

The properties involved in a land assembly deal aren’t always treated equally, depending on the circumstances and groups involved. The sale price could be an equal share for each owner, or might be per square foot, or even based on where in the assembly that property is located.

 

Is it possible to get left out of a land assembly deal?
Yes it is. The property owners have high selling power because the developer can only assemble the land if they buy several adjacent properties, but there are limits to that power.

 

Once the developer has a few properties together, pressure starts mounting on their end to start construction because of how much they’ve already invested. Delays can motivate the developer to change their plans for the site. They might just build the project around holdout properties instead of waiting for a deal.

 

What challenges do land assemblies face?

A land assembly has many of the same potential issues as any property purchase, with the added challenge of dealing with multiple vendors. Problems that can arise include:

 

errors in the legal descriptions;
gaps between the lots being assembled;
encroachments from lots not being purchased;
old easements or rights of way;
old undischarged mortgages or leases; and
orphaned laneways/homes.

 

Land assemblies are complex deals, involving the merger of several different titles. They usually require consistent cooperation amongst neighbours and require a lot of patience.  Every land assembly project is unique, and smart developers are using every tool at their disposal.

 

If you think you and your neighbours might be a good fit to start a land assembly, reach out to me anytime. I have successfully assembled and sold land assemblies and have extensive knowledge in it's inner workings. Developers will try to make you an offer that may be inticing, but your best bet is to converse with a sellers agent such as myself to get a better idea as to where you stand.