Part 4 of Sven’s video series on The Stages of Development, has landed! here are his Deal Options:
– Unconditional Purchase: is the most basic form of purchase and in our opinion ‘quite dodgy’ if the land does not have planning, we don’t use this option very often!
– Conditional Land Purchase Contract: once conditions have been met such as planning the developer is obliged to buy the land.
– Option Agreements: Our favoured method of deal. A contract with a set time, a long stop date and set price. It gives the developer the option of purchasing the land in that time frame, allowing the developer to obtain planning, undertake due diligence and to purchase the land if they still want to.
– Promotion Agreement: Between the land owner and developer, usually the developer will do the work to promote the land i.e. get the planning, then sell to the open market. Splitting the profit with the land owner.
– Joint Ventures: These can take many forms, usually between land owner, developer and a finance partner. Who come together with an agreement to suit all parties. Make sure there is CLARITY on this agreement, highlighting what everyone’s roles are and what they are bringing to the table. Our advice is to try not to partner with people who have the same skill sets as you, compliment not duplicate!
There will be a total of 8 videos in Sven’s series on The Stages of Property Development, missed any? don’t worry you can find them all on our news page, scroll down.