Holding somebody to ransom has always been held up as being underhand: a shady way of extracting money with menaces. So it’s no surprise that most people who come across the existence of a ransom strip are at first amazed that something so seemingly anachronistic can exist and, secondly, astounded that it has a legal validity and preference.
What is a Ransom Strip? Put simply, a ransom strip in its purest form is a small strip of land (it may be no more than 150mm wide, sufficient only to be able to show up on a plan) that is retained by a previous owner of the land or by the previous owner of adjoining land.
In many cases the strip of land will be situated between the main body of the land and the Highway or access. In other cases it will simply lie between one parcel of land and another.
What is its Purpose? The purpose of a ransom strip is to prevent the development of land by denying access from the land to another parcel of land or to the Highway. In truth, however, its real purpose is, more often than not, to extract payment for its release.
But Surely That’s Blackmail? Not really. Where a ransom strip is retained in a genuine effort to prevent development, it could be looked upon as some sort of permanent conservation measure, and if all efforts to get the beneficiaries to release the ransom are rebuffed then it is simply fulfilling its original purpose.
However, most ransom strips exist because the original owners of the land or adjoining land felt that they wanted to benefit from possible future development.
One example might be that somebody approached the owner of a piece of land, asking if they could buy it for use as an allotment and, as they were only going to use it for that purpose, that was reflected in the price they were prepared to pay. The owner may have wondered how, if in the future the land might benefit from planning permission, they could get their just share of the subsequent uplift in value. And one way would have been to retain a strip of land to the front, adjoining the Highway, with a gap that was sufficient only for pedestrian traffic.
Another common reason for a ransom strip is where the developer of an estate puts in all of the roads, sewers and infrastructure for an estate at the edge of the village. The fields beyond the estate are, at the time of the original development, outside the Settlement Boundary. But the developer might think that the time may come when those fields are brought within the definition of land that can be developed. ‘Why,’ they might think, ‘should the owners of that land get all of the benefit of the infrastructure we have paid for if their only means of access is via the roadway we have constructed?’ So, at the end of the cul-de-sac they might retain a strip of land between the carriageway and the boundary. The carriageway gets adopted and becomes Highways land but the ransom strip remains in the developer’s ownership, so that anybody wishing to develop the adjoining fields with access through the original estate has to negotiate with them.
How to Avoid Getting Stung: If the land is registered with the Land Registry, then the existence of a ransom strip may well be apparent in the documentation that your solicitor receives. But if the land is not registered or the strip is part of adjoining land that is also not registered, then the details may not be apparent. This is why, if there is any suspicion that a ransom strip may exist, checks should be made on site to determine the precise boundaries. If it is a simple ransom strip between the land and the road, then, in all probability, detailed measurements will appear on the plans with the title deeds.
It is vital that the existence of the ransom strip is found out before the land is purchased, because the amount required to release the ransom should be deducted from the purchase price.
Negotiating a Release: If the owner or beneficiaries of the ransom strip are known then there is no way that a private individual can force them to sell the strip of land if they don’t want to. However, cases have gone to court in the past, and it is generally held that the value of a ransom is one third of the uplift in the value of the land brought about by the release of the ransom.
Planning permission means that you may develop land — it does not mean that you can. If there is a legal or physical impediment to the development of land, then the fact that planning permission is granted does nothing to remove that restriction.
So if a plot of land is incapable of being developed, even though it has planning permission, then it can only be valued at its present use which, as a garden or paddock, may be only a few thousand pounds. But if the ransom is released then it could attain its full potential and achieve a value of, say, £150,000. So the uplift in value would be £148,000 and one third of that – and the value of the ransom strip – is £49,333.
Unknown Beneficiaries: Sometimes the owners or beneficiaries of a ransom strip may not be apparent. In the first example, the land on both sides could have changed hands several times since the original strip was retained and ownership may not be immediately apparent. In the second example the development company could have been dissolved. The rights and assets of that company may have been transferred to other parties but, once again, the beneficiaries may not be apparent.
If it does not prove possible to find the owner of the ransom, then you may well be in a better position, because it might be possible to purchase an Indemnity policy covering against the possibility of an owner turning up in the future. The premium will be assessed by the insurance company after they have made their own enquiries and will be based on the likelihood of any owner surfacing. If they find the owners, they will decline to give the Indemnity. If they feel that the chances of anybody turning up are slim, the premium, which will be a one-off single payment, is likely to be no more than a few hundred pounds and the costs may well be defrayed by the vendors.
Other Forms of Ransom:
Covenants: A ransom may not take the form of an actual strip or parcel of land remaining in a third party’s ownership. Sometimes the same objective can be achieved by placing a restrictive covenant on the land — which is a legal agreement that is tied to the land, not the owners. It can require almost anything, but it usually either prohibits development or requires payment in the event that the land is ever developed.
Access and Visibility Splays: A ransom can also come about if rights or restrictions are required over land in another party’s ownership. An example of this is when, in order to maintain clear visibility for an access, an adjoining owner is asked not to allow any obstructions to view on a section of their land (to be discussed in greater detail in a forthcoming article on access and visibility splays).
Easements and Covenants: Another way that a ransom can occur is an easement which grants another party permanent rights over the land, regardless of ownership — for instance, rights of way. A wayleave is similar to an easement but it applies to allow services to run on or under land and is a temporary right, subject to payment. In other words, an easement is in effect a permanent wayleave.