If the building permit is guaranteed for a construction project agreed in advance with the owner of the land, the land can then be put up for sale on the open market. As in the case of an option contract, the owner of the land receives a value that is put at full price, since the developer receives a royalty between 15% and 20% of the total value. In addition, the cost of the developer`s assistance will be deducted from the eventual proceeds of the sale if the land is eventually sold. It can therefore be argued that the AAE route is more expensive from a landowner`s point of view, but in our experience, the results of the open marketing of land with a full building permit are likely to improve the landowner in general. 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. Rural development can be a difficult business for connoisseurs and even more amazing for landowners who have a day job or who work their country. To unravel some of this mystery, here we give a brief guide to some of the most important thoughts in negotiating planning aid agreements. Once a buyer is secured, the owner of the land is required to sell. After closing, the organizer receives a royalty which, as a rule, is a percentage of the proceeds of the net sale after deducting promotional fees. Let`s first consider the simple difference between the two. A transportation agreement requires the developer to obtain all necessary permits for the development of the land, which will then be resold, with the developer sharing the profits of the sale with the original owner. 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. 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. In a promotion agreement, the final price obtained is the best price available on the market, subject to a tendering procedure and without the requirement to conclude immediately with planning permission – so that market fluctuations can be mitigated or exploited. 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. A transportation contract is most used when there is medium to long-term planning potential for the country. The organizer (usually a developer, but anyone can act in this way) will agree to promote the country at their own expense and apply for a building permit. The value of the land is determined at the time of signing the option contract, that is, before the increase in value that generally follows the granting of the building permit, the developer raising the highest possible selling price on the open market. The promoter funds the entire process, including covering your trial costs for the conclusion of the agreement.
This means that if, for some reason, the action is ultimately unsuccessful, the owner of the land will not be pulled out of his pocket. The organizer`s performance is paid on the sale price of the site when it is finally sold. The price they must pay can be negotiated as soon as the building permit has been issued, is set at an agreed minimum. Since the developer`s performance represents a share of the sale price of the land, their motivation is the same as that of the landowner.