Two paths to the same destination
When a strategic land company approaches a landowner, the contract usually takes one of two forms: a Promotion Agreement or an Option Agreement. Both give the company time and resource to pursue planning consent. Both are legitimate, well-established structures used across the industry. But the way you get paid — and the risks you carry along the way — are fundamentally different.
This guide sets out how each works so you can make an informed choice based on your circumstances, not ours.
Option Agreement — a fixed-price route to certainty
Under an option agreement, the company has the right but not the obligation to buy your land at an agreed price (typically expressed as a discount to open-market-with-consent value, often in the 80–90% range) within a fixed period. If planning is granted and the option is exercised, you sell directly to the company at the pre-agreed figure.
How you get paid: A fixed price, known upfront, paid on completion.
Strengths
- Certainty of sale price — you know exactly what you'll receive if consent is achieved.
- Simpler exit — one buyer, one contract, no marketing process.
- Faster completion once the option is exercised.
- Peace of mind if you have a specific number in mind or a timeline to meet (retirement, inheritance planning, debt repayment).
Trade-offs
- If the site sells to a developer for more than expected, that upside sits with the company — not you.
- The discount to market value is where the company earns its margin and reward for the planning risk.
This route often suits landowners who value certainty over maximising the top-end number, or who want a clean, predictable transaction they can plan their finances around.
Promotion Agreement — a shared-upside route with market exposure
Under a promotion agreement, the company does not buy your land. They fund the planning process at their own cost and risk. Once consent is achieved, you and the company jointly market the consented site to housebuilders and developers. The company takes an agreed share of the net proceeds, and you receive the remainder.
How you get paid: A share of whatever the open market pays — after promotion costs and the company's fee are deducted.
Strengths
- You retain ownership throughout the planning process.
- Full market exposure — if the site sells for a strong price, you share in that outcome.
- No fixed ceiling on what you might receive.
Trade-offs
- The final number is not known upfront — it depends on what the market pays on the day.
- The marketing process is more involved than a single-buyer sale.
- If market conditions soften between consent and sale, the outcome softens with them.
This route often suits landowners who are comfortable with market exposure, want to retain ownership until sale, and are willing to trade some certainty for the possibility of a stronger outcome.
A quick comparison
| Option Agreement | Promotion Agreement | |
|---|---|---|
| You sell to | The company | A developer on the open market |
| Price known upfront | Yes | No |
| Market upside | Company keeps it | Shared with you |
| Market downside | Company absorbs it | Shared with you |
| Ownership during planning | You retain it | You retain it |
| Complexity at exit | Lower | Higher |
| Best when | Certainty matters most | Maximising the outcome matters most |
Neither is universally 'better'
The honest answer is that neither structure is automatically the right one. The right choice depends on:
- Your appetite for market risk
- Whether you need a known number for planning purposes (tax, retirement, family)
- How long you're willing to wait for a sale
- Your view on where the local development market is heading
- Whether the site has unusual characteristics that favour one route
Some sites suit an option. Some suit promotion. Some are best structured as a hybrid — for example, a promotion agreement with a minimum guaranteed sum, or an option with an overage clause that returns some upside to you.
What Upsurge does
We work under both structures. When we engage with a landowner, our first job is to understand your situation — what you want to achieve, when you want to achieve it, and what level of certainty matters to you. From there we recommend the structure we honestly believe fits your objectives, and we explain the reasoning in plain English.
We do not push landowners into one route because it suits us. The best long-term outcomes — for the landowner and for our reputation — come from choosing the right structure for the right site.
Both agreements are heavily negotiable, and the details matter as much as the headline. Always have a solicitor experienced in strategic land review any agreement before signing. We will contribute towards your reasonable legal fees on any agreement you sign with us.