Promotion Agreements

Suppose you have been approached directly by a developer or promoter with an offer for your land. In that case, it’s important not to sign anything or make any commitments before taking specialist advice.

Early conversations often shape the entire commercial position, and developers will typically move quickly to secure favourable terms.

Key steps to take include:

• Seek legal advice immediately to understand the implications of the proposed offer or agreement.
• Do not agree to exclusivity or allow the developer to incur costs on your behalf without advice.
• Consider whether a promotion agreement, option agreement or open-market sale would produce a better financial outcome.
• Instruct a specialist surveyor or valuer to assess whether the offer reflects the potential development value.
• Understand the long-term consequences, including planning strategy, tax implications and the impact on future land use.

Developers and promoters are highly experienced commercial operators. Having the right legal and professional support from the outset ensures clarity, protection and a stronger commercial outcome.

A land promotion agreement sets out the terms on which a promoter will seek planning permission for a landowner’s land and how the land will be marketed and sold once planning is secured.

Key elements typically include:

• The promotion period and planning strategy
• The promoter’s obligations, including funding all planning costs
• How the land will be marketed for sale
• The promoter’s fee or percentage share of the sale proceeds
• Valuation mechanisms, including minimum sale price protections
• Cost recovery provisions
• How disputes will be resolved

A well-drafted agreement ensures that both sides clearly understand their rights, responsibilities and financial entitlements.

Promotion agreements can offer significant advantages, particularly for landowners unfamiliar with the planning process. Benefits include:

• The promoter funds the planning costs, reducing the landowner’s financial risk
• The promoter’s interests are aligned with the landowner’s, as both benefit from a higher sale price
• The land is professionally promoted through a coordinated planning strategy
• Landowners can benefit from the maximum uplift in value once planning permission is obtained
• Landowners remain the owners of the land until the eventual sale

This structure often leads to a stronger planning application and a more competitive sale process.

While promotion agreements can be highly beneficial, they do carry risks, including:

• Long-term commitment: These agreements often last several years.
• Reduced control over the planning strategy, unless carefully negotiated.
• Risk that planning is not achieved, delaying or reducing potential returns.
• The promoter may prioritise a strategy that suits them unless the agreement clearly defines obligations.
• Poorly drafted valuation or sale provisions could limit the landowner’s financial return.

Specialist legal advice ensures that risks are properly managed and mitigated.

Land promoters typically:

• Conduct viability assessments and engage planning consultants
• Commission surveys and technical reports (e.g. ecology, highways, drainage)
• Prepare and submit a robust planning application
• Manage negotiations with local authorities
• Pursue planning appeals where necessary
• Work with marketing agents to prepare for sale upon receiving planning approval

A strong promotion agreement ensures the promoter follows a clear strategy and meets defined standards of diligence.

Before entering into an agreement, landowners should consider:

• Whether the promoter’s fee and cost recovery terms are fair
• The promoter’s track record and financial standing
• The planning strategy and expected timescales
• Whether minimum sale price protections and overage are included
• How decisions will be made during the promotion and sale process
• The professional team involved, including surveyors and planning consultants
• Tax implications and long-term estate planning considerations

Legal advice at the heads of terms stage is crucial to ensure the agreement is commercially balanced and fully protects the landowner’s interests.