To address this deficiency, overcharged provisions are included in the option agreements to achieve the added value resulting from an additional building permit obtained after the option is exercised. This is especially useful when the developer obtains successive planning permissions in stages. Iain gives the appeal of rural development to developers – and how this allows landowners to engage in LAPs with developers if they want to maximize their income. LPAs can be ordered in different ways, so that the associated developer can help the landowner return the sale without the additional pressure required to obtain a building permit or find a buyer. As these agreements are flexible – and can last for many years – it is important that landowners understand their VAT position, so that the final cost of VAT does not surprise them when the sale ends. As part of a transportation agreement, landowners and developers cooperate with the common goal of maximizing the value of the land and securing a sale. The landowner is not required to sell the land, so one can wait to see how much the planning and assistance process adds to the value before making a decision. The developer receives an agreed share of the potential proceeds of the sale, so that the landowner wishes to obtain the highest possible price. She has developed a particular expertise in managing complex real estate development issues, including transportation contracts. A promotion agreement (sometimes called a land support contract or development promotion agreement) is a form of contract that mimics the appearance of an option agreement and may well include options for the developer/developer to acquire the land.
The parties to a transportation contract are usually the owner of the land and the «promoter,» who is usually a real estate developer. The promoter must levy VAT on its promotional fees. Therefore, the owner of the land can make a choice of VAT to recover the VAT. Under a promotion agreement, the developer can avoid paying the option fee or non-refundable surety – a nice benefit if he sits on the same side of the bargaining table as the landowner. However, it would be customary for the developer to cover the legal costs of the landowner when the promotion contract is concluded – which is similar to option contracts. Some developers may require that an option or pre-purchase be included in the transportation contract so that they can purchase the property themselves once the planning is complete. There is a balance between the owner of the land, which imposes his desires, and the postponement of the developer.https://wikifama.com/taxation-of-promotion-agreements/