Promotional agreements are attractive to developers, as they do not need financing and have to buy the property themselves or actually have associated SDLT costs. After deciding to follow the path of a promotion agreement, what should the landowner think about? It can be a complex area, as no two provisions are the same. Since the numbers are high, it is important to get advice ideally before the contracts are signed. As part of a promotion agreement, landowners and developers work together with the common goal of maximizing land value and securing a sale. The landowner is not required to sell the land, so they can wait to see to what extent the planning and advertising process contributes to the value before making a decision. The developer receives an agreed share of the proceeds of the sale, thus sharing the landowner`s desire to get the highest possible price. The parties must decide who appoints the agent in the sales process. The landowner may have his or her usual land agent, but a developer may also have his or her own preferred or related agent. One of the essential aspects of the promotion agreement will be whether the landowner should be protected by a minimum price, so that in the event of a bad market, he is not forced to sell at the time of its marketing. Landowners need to be cautious about whether the benefits of the transportation agreement could be lost.
Is the organizer likely to sell immediately at a profit on the site? The main advantage for the landowner is that he/she does not have to incur significant advance charges to obtain the building permit, especially since the time to obtain it can be long. If no planning is requested, there is usually no charge. This benefit is offset by the fees to be paid to promotion agents for its services. If you have land that is ripe for development, how do you make sure you get the best possible return on its value? If you don`t have experience in design and construction, you`ll likely need the expertise of a professional developer to increase the value of the land. The two most common ways to arrange this are a transportation option or agreement….