There will often be a number of parties involved in the agreement, but each agreement will focus on the obligations of the landowner and the developer/promoter. A transportation agreement is an agreement between a landowner and a planning specialist to promote the owner`s land through the development process in order to obtain the building permit. Once the building permit is issued, the landowner and the developer cooperate to market and sell the land to a developer. The price paid by the developer would then be divided between the landowner and the developer on a previously agreed basis. However, the main drawback is that the landowner and developer sit on opposite sides of the option table and are thus on the hot seat under many conditions, including the purchase price and the amount of the overrun. This adversarial approach could complicate the conclusion of the agreement and even potentially derail the agreement. The transport contract, in which landowners and developers work in the same way for a common purpose, could therefore be negotiated more easily and therefore concluded. What`s the best part? The decision will be made on the desire of the landowner to participate in the assistance process and on the relationship between the developer and the landowner. An expert lawyer will be able to guide the landowner in this decision and, crucially, ensure that the formal agreement with the developer reflects exactly what the parties have agreed.

Good preparation will contribute to the success of the development project and avoid wasting profits in the event of costly litigation. To address this deficiency, overcharged provisions are included in the option agreements to achieve the added value resulting from an additional building permit obtained after the option is exercised. This is especially useful when the developer obtains successive planning permissions in stages. An option contract is a form of land sale contract. As far as contracts are concerned, option agreements are a curiosity, as the content or purpose of the contract will not be concluded for a period of time, in some cases, several years. This assumes that the option will be exercised naturally and that the contract is usually concluded! 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. 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. Under an option agreement, the developer or developer will reduce the price paid for the land from the amount of planning benefit payable (in cash or in kind) to the granting authority.

Option Agreement – A developer intends to apply for building permit for property development, and needs an option to purchase the property after obtaining a building permit. As a general rule, an option fee is paid to the landowner for the option. Once the building permit is issued, the developer can notify the purchase of the land at a price previously agreed with the landowner, which is usually a reduced percentage of the market value. One of the most important considerations for a landowner will be to what extent he wishes to be involved in the planning process.