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Promotion Agreements Planning

The landowner must be able to freely use the land for a long period of financing, including the lease of the land. Of course, a promotional contract does not free you from the above risks. However, there are mechanisms to protect you from these risks, and our JMW sales team is very experienced in the actions of promoters who enter into such agreements and to protect themselves from the risks and pitfalls that may arise. In the past, this was how a landowner promoted his land at no cost to himself. A developer will take an option to purchase his land and will have only limited obligations to obtain the building permit. When exercising the option, most likely if the building permit was obtained by the developer, the developer will pay the open market value for the site (often less than 5-15%) at the time of exercise of the option. The price they must pay can be negotiated as soon as the building permit has been issued, is set at an agreed minimum. A transport contract is a legally binding contract between the landowner and his partner – usually a land developer. They can be applied to any type of site, but they are usually used where the planning permission is not right and can take several years. Landowners whose land has current or future residential development potential can secure value in their country in a variety of ways. If the prospect of a residence permit is short-term, the owners can support the land themselves through the planning process (and all the costs associated with it) before trying to sell or become more likely, they will enter into a conditional sale contract with a developer who will obtain the building permit himself before concluding the purchase of the land at a pre-agreed price.

The landowner will do the whole process. You develop the planning strategy, you appoint and lead a team of consultants, you are in contact with the Council and you negotiate the possible sale of the land to a developer. Option agreements were the traditional (and most popular) method for a developer to promote terrestrial development in order to maximize its value and minimize some of the risks. The option agreement gives potential developers the right to purchase strategic land for a predetermined amount within a specified time frame; in general, once the developer has obtained the appropriate building permit for the development of the site. These are often longer-term projects and sites with no short-term planning potential. The landowner may attempt to link a developer to a conditional sale agreement that will require the developer to purchase the land when planning is done. While the competitive nature of a promotional agreement is a good thing, the potential drawback is that the promoter is not necessarily in the best position to understand what local developers are looking for. There is a risk that huge amounts of money and time will be spent on obtaining planning approval for a system that no one wants to buy or build, either because of the different requirements of the local market or because it is not economically viable.

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