Option and promotion agreements in plain words
The two ways a landowner is paid on planning uplift without paying for planning. What each is, who it suits and what happens if it fails.
Option agreement
We buy. You know the price first.
You grant us the right, for a fixed period, to buy the land once planning is granted. The price is set in the agreement, either as a figure or as a formula: the market value with planning, less the planning costs, with a discount that reflects the risk we carried. We pay for and run the application. If permission is granted we buy. If it is refused and an appeal fails, the agreement ends and you keep the land.
Good for: owners who want to know the number before they start. Also land that fits a buyer we already hold, because then the sale is to that buyer.
Promotion agreement
We win the planning. We sell it together.
We take on the cost and work of winning planning, then the land is sold on the open market to the highest bidder, usually a housebuilder. The proceeds are split: our costs come back first, then an agreed share each. You stay the owner throughout and sell as the owner at the end.
Good for: larger sites where several housebuilders would compete. Also owners who prefer an open sale to a fixed buyer.
Side by side
The questions that decide between them
| Question | Option | Promotion |
|---|---|---|
| Who buys at the end? | The Land Buyer or the buyer named in the agreement | Whoever bids most on the open market |
| When is the price fixed? | At the start, as a figure or a formula | At the end, by the market |
| Who pays for planning? | The Land Buyer | The Land Buyer |
| If planning fails? | Agreement ends; you keep the land; you owe nothing | Same |
| How long does it run? | Usually 3 to 5 years, extended if an appeal is running | Usually 5 to 10 years |
| Can I sell to someone else meanwhile? | No, that is what the option is | No, the agreement is registered against the title |
| Can I keep farming or letting it? | Yes | Yes |
| Who pays my solicitor? | The Land Buyer, to an agreed cap | The Land Buyer, to an agreed cap |
If planning is refused
You keep the land. We lose the money.
This is the part that matters most and the part most sites skip. If the council refuses and an appeal fails (or we decide an appeal is not worth running), the agreement comes to an end on the date it says. You owe us nothing for the surveys, the drawings, the consultant or the council fee. You are free to do what you like with the land, including going to someone else. The only thing you have lost is the time. The full guide.
You instruct your own solicitor for the agreement and we pay the fee up to a cap written into the heads of terms. We will not proceed without it. A land agreement is a serious document and the person reading it for you should be yours.
Questions landowners ask
Straight answers
What is the difference between an option and a promotion agreement?
Who pays for the planning application?
How long does an option agreement last?
Can I change my mind after signing?
What happens to my tenant or my grazing licence?
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