Strategic land promotion explained

Promotion agreement or option?

Under a promotion agreement the promoter funds and runs the planning process, the land is then marketed on the open market, and the promoter takes an agreed share of the net proceeds. Landowner and promoter interests are aligned, because both are paid from the same sale price.

Under an option agreement a developer acquires the right to buy, usually at a discount to market value once permission is granted. That can suit landowners who want certainty of buyer, but the incentive on price differs.

Who pays

In a promotion agreement the promoter typically carries the planning cost at risk: technical consultants, plan-making representations, application fees, appeal costs where needed. If nothing is achieved, those costs are not usually recoverable from the landowner.

Timescales

Strategic promotion is a long process. Allocation through a Local Plan review is measured in years, and consent, sale and build-out add more. Anyone offering a quick, certain outcome on unallocated strategic land is describing something other than plan-led promotion.

What to check before signing anything

Promotion agreements are commercial documents and vary widely. Independent legal and tax advice is essential; the points below are the ones that most often matter.

• The promoter's share, and whether it is calculated on gross or net proceeds.
• Which costs are deducted before the split, and whether they are capped.
• The term of the agreement and any extension mechanism.
• Minimum price protection for the landowner.
• Planning triggers, and what happens on refusal or non-allocation.
• Tax treatment, including any overage and the position on agricultural reliefs.