I have written much about the pros and cons of different development agreements and you can read more here and while both can yield success for landowners, promotion sometimes has the edge in terms of alignment of interests with the landowner.
One matter often overlooked by clients is tax. Seeking specialist tax advice at the outset, whether IHT or CGT (preferably before a development agreement is signed) could save the landowner significant sums.
Other important issues relate to requiring a minimum payment to the landowner when the land is sold and capping the developer’s deductible costs.
A minimum receipt to the landowner ensures the land isn’t sold cheaply and insisting on clauses for overage and clawback can allow the landowner to share in any future uplift in values of the site even once it has been sold.
We have a specialism in negotiating option and promotion agreements for landowners. Please contact me to discuss how we can help – www.hawkspur.co.uk
