Promotion and Option Agreements
Promotion and option agreements are frequently used by developers and housebuilders to secure an interest on property with the potential for planning permission, in order to then obtain consent and receive a share of the sale proceeds in return for their risk and efforts. Hawkspur negotiates the best commercial terms of such agreements for landowners and advises as to the advantages and disadvantages of each.
Typically, the developer should pay the landowner a “signing up” premium when it enters into a development agreement, to then promote the land for development at its own expense, including potentially taking a refused application to appeal. If successful then sale proceeds are split, with the majority being retained by the landowner.
Promotion and option agreements are a tried and tested way for landowners to have their land promoted for development by a specialist developer while still benefitting from a significant sale receipt if successful. The key is to select the right development partner whose interests are as closely aligned with the landowner’s as possible. Hawkspur advises its clients on selection of such developers for a successful outcome.
