The Housebuilding Handbook: Your pocket guide to building a low risk, high reward property development business on a solid foundation by Brynley Little & Richard Little

Author:Brynley Little & Richard Little [Little, Brynley]
Language: eng
Format: epub
Publisher: Rethink Press
Published: 2019-04-23T00:00:00+00:00

Control contracts give you as the developer rights over land you do not (yet) own, allowing you the opportunity to invest in adding value, usually through planning prior to purchase or sale. The most common control contracts are option agreements and promotion agreements.

Option agreements have been around for centuries and are often the agreement of choice for both small and large developers for sites without planning in place. They allow you the option to purchase without obligation, mitigating the risk of having to purchase a site regardless of whether you obtain planning consent successfully or not.

Promotion agreements are commonly used on sites without planning permission. With this type of agreement, the developer (or land promoter) is prepared to take the financial risk of obtaining planning permission, and the landowner is prepared to share a portion of the resulting uplift in value with them. Land promotion usually takes place on strategic pieces of land on the edge of urban and rural settlements.

Below is an example deal done under a promotion agreement.

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