Developers, landlords, investors, professional tenants, housing corporations, lenders, education and utility organizations, and individuals are part of their wide range of clients, large and small. Option agreements are therefore the most frequently used and most landowners are familiar with this model. Where there is a risk that the developer will also be confronted with competing sites that could affect the likelihood of success, the landowner should respect the developer`s agreement not to market competing areas. This is the usual way of ensuring payment under a fonal aid agreement. The agreement only provides for a contractual obligation for the owner of the land to pay the developer`s share to the developer if a satisfactory building permit has been issued and the land is sold with this authorization. However, such a confederation does not generally apply with the Land and is binding on the beneficiaries and is therefore generally insufficient for the parties. The contractual obligation depends on the financial capacity and sustainability of the owner of the land and does not offer any guarantee of payment to the developer. However, if the owner of the country is a significant organization and his or her assets have been thoroughly investigated, a developer may be satisfied that the landowner is likely to remain financially strong during the eligibility period. From time to time, personal obligations are also backed by bonds or guarantees, and I will come back to this later in this article. If both agreements are well negotiated, they can achieve a satisfactory result. But the specific situation of the land, its location, its local market characteristics and the planning heritage of the area should be taken into account when deciding on the best approach, which is why it is always useful to seek professional advice. Hazel Eccles, Senior Partner in our Real Estate Team and Head of our Agriculture and Rural Lands Team, examines the pros and cons of entering into an option agreement or development agreement. Promotion Agreement – A developer or developer undertakes to apply for a building permit for development on a landowner`s land and to market the property for sale on the open market once the building permit is available.
The promoter first finances the planning and marketing costs. If a building permit is obtained, the property is marketed and sold for sale. The developer`s fees are reimbursed to the developer on the gross proceeds of sale and the developer receives a portion of the net proceeds of the sale (together with the landowner). One of the main thoughts for a landowner will be how much they want to be involved in the planning process. A promotion agreement provides the landowner with a higher level of control and participation in planning and promotion and allows a landowner to better know the value they will get for the land before accepting the sale. . . .