03 October 2023

Getting best price on land disposals – can you accept a lower “bird in the hand” offer?

Section 63 of the Land Drainage Act 1991 allows boards to dispose of most land interests as they wish as long as the consideration they get for the land is “not less than the best that can reasonably be obtained”.

What does 'consideration' mean?

‘Consideration’ means value or price.

Employment illustration

What happens when two developers make competing offers for the same land and the board thinks the lower offer is more reliable – a “bird in the hand”?

In R(Cilldara) v West Northamptonshire Council [2023] EWHC 1675 (Admin), the council was bound by the same rules as section 63. It owned a former landfill site next to Northampton Town FC’s stadium. Two developers made multiple offers for the site. The site was contaminated and needed remediation. Cilldara offered more money, but the council decided the other developer’s proposal was more credible and accepted its lower offer. Cilldara took the council to judicial review.

The High Court rejected Cilldara’s challenge. The duty to obtain best consideration was subject to the “bird in the hand” doctrine. The council could accept a lower but more realistic offer. However, it was significant to the judge’s ruling that the council had obtained two expert valuations, gave adequate reasons for its decision and acted fairly towards both bidders.

If you intend taking a “bird in the hand” bid, then it is essential to get professional valuations and document your decision-making process fully. Get in touch to see how our regulatory and public law team can help.

Jonathan Goolden, Wilkin Chapman LLP
Need help?

Contact Jonathan to discuss this further.

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