There are a number of important first steps before entering into a promotion or option agreement, and as you might expect, an interview with a real estate lawyer and an experienced tax advisor is the best starting point. The main difference, therefore, is that the two parties, as part of a promotion agreement, are working to achieve a common goal: maximizing the price for which the country is sold. As part of the option agreement, it is in the option holder`s interest to do exactly the opposite – the less they can buy the land, the more profits they can make. Option Agreement: The developer has the option to acquire the land within an agreed time frame from the landowner, who authorizes the option or requires the developer to obtain the building permit in order to generate the improved purchase price. Part of it is choosing to eat an apple or a pear — they have similarities and differences. There are many other agreements that can be considered (see the following article “What are a landowner`s options for strategic land development?” for more information), but option and transportation agreements are generally the most popular. Option agreements may place the developer and landowner on the opposite side of the “no” to the negotiation process with respect to the purchase price and the level at which possible over-age payments are triggered. One of the most important considerations for a landowner will be to what extent he wishes to be involved in the planning process. A transportation contract will give the landowner a greater degree of control and participation in the design and promotion and allow an owner to better understand the value he or she gets for the land before accepting the sale.
On the other hand, an option agreement leaves these issues in the developer`s control under the terms of the agreement. The negotiation process remains a challenge for both parties, but the partnership approach of the promotion agreement is increasingly the preferred choice for those willing to share rewards against efforts. This scheme gives the landowner and the developer the same goal of achieving the maximum profit together. Transportation agreements also provide greater security for sale and often in shorter time frames. Planning obligations, also known as “planning benefits” under heading 106, are used to mitigate the impact of development by adopting local improvements, effect options and different transportation agreements. Regional Assembly: When a developer collects smaller land, buys land or uses contracts or ownership options, which are then merged into a larger, viable system. “If a transportation option or contract is best suited, it depends on how narrow your involvement in the planning and promotion process is,” says Simon Walker, commercial real estate lawyer at Talbot Walker in Andover. “An option agreement leaves the planning and marketing process largely in the hands of the developer.
Under a transportation contract, the landowner is much more convenient and will know the value of the land before agreeing to sell it. A key features Option is a contract under which the landowner agrees to sell land to a developer if the developer decides to purchase it within a fixed option period. The price is either fixed at the outset or calculated if the developer exercises the option taking into account the market value of the land on that date.