Written by the Revive Estates Group team — independent land development consultants helping landowners across the UK understand and unlock the development potential of their land, property and buildings.
The short answer
Both agreements allow a developer or promoter to work towards planning permission on your land at their cost and risk — but they work very differently. An option agreement gives one developer the exclusive right to buy your land. A promotion agreement opens your land to competitive bidding from multiple developers once planning is secured, which typically delivers a higher price. Which is right for you depends on your site, timescale and objectives.
What Is an Option Agreement?
An option agreement is a legal contract between a landowner and a developer that gives the developer the right — but not the obligation — to purchase your land at a future date, usually once planning permission has been secured.
Under a typical option agreement, the developer funds all planning costs — architects, consultants, surveys, planning application fees — at their own risk. If planning is refused, the developer cannot force a sale and the landowner retains ownership throughout.
If planning permission is granted, the developer can choose to exercise their option and purchase the land, usually at a price linked to market value at the time of sale. The landowner is then obliged to sell on those terms.
What Is a Promotion Agreement?
A promotion agreement is an arrangement between a landowner and a land promoter. Rather than buying your land, the promoter works on your behalf to secure planning permission — funding all planning costs — and then sells the land on the open market to the highest bidding developer.
Because multiple developers can bid competitively for the site once planning is secured, promotion agreements typically deliver higher land values than option agreements, where only one developer is involved throughout.
The promoter recovers their costs from the sale proceeds and takes an agreed percentage — typically 15–25% — with the landowner receiving the remainder. If planning is refused and no sale takes place, the landowner pays nothing.
The Key Differences Between the Two
The fundamental difference comes down to who benefits from the competition at the point of sale.
In an option agreement, the developer who funded the planning process has the exclusive right to purchase. There is no competitive bidding. The price is determined by a mechanism agreed at the outset — often a percentage of market value assessed by an independent valuer — but the developer is the only buyer.
In a promotion agreement, the promoter markets your land to the entire developer market once planning is secured. Multiple housebuilders, developers and land investors can bid. This open competition is what drives the price up — and is the primary reason promotion agreements tend to outperform option agreements on larger sites.
How Is the Price Determined in Each?
Option agreement pricing
Most modern option agreements use a formula linked to the market value of the land at the point the option is exercised, rather than a fixed price agreed at the outset. An independent valuer is appointed to assess market value once planning is secured, and a percentage of that figure — typically 80–90% — is paid to the landowner. This protects against the land being undervalued at the start of a long agreement, but it still relies on a single valuation rather than competitive market testing.
Promotion agreement pricing
Under a promotion agreement, the land is sold by tender or informal tender to multiple interested developers. The sale price is determined by actual market competition — what developers are genuinely prepared to pay. Planning costs and promotion fees are then deducted, and the net proceeds are split between the landowner and promoter according to the agreed percentage. Because the price is set by the market rather than a formula, promotion agreements often achieve prices above what an independent valuation would have suggested.
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On larger strategic sites, promotion agreements typically deliver higher returns. The open market competition between multiple developers at the point of sale is the key driver — and it consistently outperforms a single negotiated purchase price in a well-run promotion.
However, this is not a universal rule. On smaller sites, or where a single developer has a strong strategic reason to acquire a specific site, an option agreement can deliver a competitive outcome. The quality of the terms negotiated — percentage of value, option period length, planning milestones — also has a significant impact.
What matters most is that the agreement you enter into reflects the genuine potential of your site and is negotiated with your interests fully represented.
What Are the Risks of Each?
Risks of option agreements
Option agreements can tie up your land for several years. During that time, you cannot sell to anyone else. If the developer decides not to pursue planning, or pursues it without the urgency you might expect, the agreement simply runs its course and expires — leaving you no better off than when you started, but having lost years of time.
The terms of option agreements can also be complex, and some contain clauses that heavily favour the developer — extended option periods, broad rights to determine planning strategy, and dispute resolution mechanisms that are costly for the landowner to use. Independent legal advice before signing is essential.
Risks of promotion agreements
Promotion agreements are longer-term commitments. The planning process for larger strategic sites can take 5–10 years, and there is no guarantee of success. If planning is refused and no sale takes place, the landowner pays nothing — but they have lost time and the opportunity cost of having the land tied up.
The quality of the promoter also matters significantly. A promoter with strong planning expertise, good relationships with local authorities and a track record of delivering planning permissions will typically achieve better outcomes than one without. Choosing the right promoter is as important as the terms of the agreement itself.
Which Types of Site Suit Each Agreement?
Option agreements tend to suit:
Smaller infill sites and garden plots where a single developer is the most realistic buyer.
Sites where the planning route is relatively straightforward and timescales are shorter .
Situations where the landowner wants certainty of sale to a known buyer rather than open market exposure.
Sites where the developer has a specific strategic need for the land.
Promotion agreements tend to suit:
Larger greenfield and strategic land sites where multiple developers would compete .
Sites requiring promotion through the Local Plan process over longer timescales .
Landowners who want to maximise value through open market competition at the point of sale.
Sites where the landowner does not want to commit to a single developer at the outset.
Can You Negotiate the Terms of Either Agreement?
Yes — and you should. Both option agreements and promotion agreements are negotiable documents. Key terms to focus on include the length of the agreement and any extension rights, planning milestones and what happens if they are missed, the percentage of value or proceeds payable to the landowner, dispute resolution mechanisms, and what happens if planning is refused.
Getting independent legal advice from a solicitor experienced in development land agreements is essential before signing either type of agreement. Similarly, getting independent planning or land consultancy advice — which Revive Estates Group provides free of charge — ensures you understand whether the route being proposed is the most appropriate one for your site.
Been offered an option agreement or promotion agreement? Get independent advice first.
Developers and promoters are experienced at structuring agreements that work in their favour. Many landowners who come to us after signing discover that better terms — or a more appropriate route entirely — were available to them.
Our free land assessment gives you an independent view of your site’s potential and the most suitable route forward — before you commit to anything. No cost, no obligation, reviewed personally by our team.
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Choosing between an option agreement and a promotion agreement is one of the most consequential decisions a landowner can make. The wrong choice — or poorly negotiated terms — can cost significantly more than the professional advice needed to get it right.
At Revive Estates Group, we provide a free, no-obligation land assessment to help you understand your site’s potential and identify the most appropriate route forward — whether that’s an option agreement, a promotion agreement, a direct developer introduction, or something else entirely. We’ll give you an honest, independent view with no pressure to proceed.
Request Your Free Land Assessment →No cost. No obligation. Every enquiry is reviewed personally by our team — we’ll tell you honestly which route is most likely to deliver the best outcome for your land.
Frequently Asked Questions
Can I withdraw from an option agreement once signed?
Generally no — option agreements are legally binding contracts. Once signed, the developer has the contractual right to pursue planning and exercise the option within the agreed terms. This is why independent legal advice before signing is essential. Some agreements include break clauses or termination rights in specific circumstances, but these need to be negotiated upfront.
What percentage does a land promoter take?
Promotion fees typically range from 15% to 30% of net sale proceeds, with many agreements settling around 20–25%. The percentage varies depending on site size, planning complexity and anticipated risk. Landowners should focus on the net return rather than the percentage alone — a skilled promoter securing a significantly higher sale price can leave the landowner better off even after a larger promotion fee.
How long does a promotion agreement last?
Agreement periods are typically 3–5 years for sites with near-term planning potential, 5–10 years for larger strategic sites, and longer for sites being promoted through the Local Plan process. The length reflects the time needed to secure planning permission and complete a competitive sale.
Do I need a solicitor for an option or promotion agreement?
Yes, absolutely. Both types of agreement are complex legal documents that can significantly affect the value you ultimately receive for your land. An independent solicitor experienced in development land transactions should review any agreement before you sign. You should also seek independent planning or land consultancy advice to ensure the route being proposed is the most appropriate one for your site.
What happens if planning permission is refused?
Under both types of agreement, if planning is refused and the agreement expires, the landowner retains ownership and is not normally responsible for the developer’s or promoter’s planning costs. However, the specific terms of your agreement govern what happens in this scenario, which is another reason to have independent legal advice before signing.
Is a promotion agreement the same as a joint venture?
No. In a promotion agreement, ownership of the land remains with the landowner throughout. The promoter acts on your behalf but does not own or co-own the land. A joint venture typically involves shared ownership or a more complex profit-sharing arrangement. Promotion agreements are generally simpler and more straightforward for landowners than joint venture structures.
This guide was prepared by the Revive Estates Group team. Revive Estates Group are independent land development consultants based in the UK, providing free land assessments and expert advice to landowners exploring their development options. All content is reviewed regularly to reflect current UK planning policy.