Glossary
Promotion agreement
A promoter funds planning, the landowner sells with consent, and the promoter takes a share.
What it means
Under a promotion agreement, a land promoter pays for the planning application and the landowner keeps ownership. When permission is granted, the land is sold on the open market and the promoter recovers its costs from the proceeds, then takes an agreed share of the rest, often 15 to 25%. Landowners like that the price is tested in the market; promoters take less of the upside than under an option but spend less up front.
Worked example
ExampleThe same paddock under a 20% promotion agreement, with £37,000 of planning costs.
- Sale with planning, less 2% selling costs
- £729,120
- Less planning costs recovered
- £692,120
- Promoter's 20% share
- £138,424
The promoter's risk is the planning spend. Its reward rises with the sale price, as the landowner's does.
Information, not advice. Example figures are fictional and for illustration only.