Landowners selling sites should ensure they understand the difference between promotion agreements and option agreements – to avoid disputes when selling.
With a Promotion Agreement, the land promoter seeks to maximise the planning potential of the site in order to appeal to the widest range of developers, as the promoter takes a percentage of the ultimate sale price.
Under an Option Agreement, the landowner agrees to sell the land, subject to certain criteria being satisfied, but it is up to the developer to decide whether to go ahead with the purchase or not.
Alex Khan, senior partner of Brindley Twist Tafft & James, a Warwickshire-based law firm, said: “Understanding these agreements is crucial to unlocking the full value if you own land that has development potential.”
Khan said the company has noticed a significant surge in enquiries to county landowners from developers and promoters.
He added: “The picture has been further clouded by the government’s commitment to look favourably at the development of what has been described as the ‘grey belt’ – not brownfield and not heavily protected green belt sites.
“This means that land that was previously considered unlikely to be considered for planning permission is now firmly in the frame and developers and land promoters have such sites very much in their sights.”