The two most common ways of selling land that does not have a current or appropriate planning permission are via an Option Agreement or a Promotion Agreement.

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An Option Agreement is a contract entered into in which a landowner gives a developer the right to buy their land within a specified timeframe. The developer then typically tries to obtain planning permission, and then decides whether or not to purchase the land. The price is usually agreed when initially entering into the agreement.

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A Promotion Agreement is an agreement that a landowner has with a planning specialist/developer to take the landowner’s land through the planning process with a view to gaining planning permission.  Once planning permission is granted then the land is sold. The price paid by the buyer of the land would then be split on a pre-agreed basis between the landowner and the promoter.

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At Redwood we find that landowners prefer to sell their land via a Promotion Agreement, as it has the following advantages:

• The landowner and promoters interests are aligned for the entirety of the process. The promotor is motivated to achieve a planning permission that achieves the highest sale value of the land (as they receive an agreed percentage of the sale proceeds). The highest possible land sale price also benefits the landowner

• Once planning is achieved the land is usually sold on the open market, so the highest possible sale price is obtained.

• The land owner has much more control over the development of their land, they can have as much or as little input into the process as they like.

• Typically the landowner will achieve a higher price for their land when selling through promotion agreement.