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Jo C.
Jo C., Barrister
Category: Law
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Experience:  Over 5 years in practice
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If I entered into an Option Agreement for development of a

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If I entered into an Option Agreement for development of a site and was granted PP, would I then be able to then enter into a subsequent arrangement with a developer, eg.1 offer them a certain % of profit in exchange for them financing the build? eg.2 taking a small % of the sales and/or an introduction fee in exchange for letting a developer build and sell the properties?
Would this be an unusual situation or do people regularly make deals with other parties once they are in the position of having an Option, plus planning permission?
Submitted: 2 years ago.
Category: Law
Expert:  Jo C. replied 2 years ago.
Hi.
Thank you for your question. My name is ***** ***** I will try to help with this.
Has the person with the benefit of the option agreement but any kind of restriction on the property confirming they have the agreement.
Is the person with the option agreement and the developer the same person?
If there is an option agreement with the 1st person in the developer as someone else, how would the 1st person be remunerated in respect of someone else's development or how would the developer be remunerated in respect of the 1st persons option agreement?
Can you please explain exactly what you are trying to do because it is not clear.
Jo
Customer: replied 2 years ago.

The Owner is willing to enter into an Option with me to develop this land. In effect I become the 'developer'. I would pay a fixed amount for the land when Planning is awarded. I have not yet seen the terms of the Option but have asked for a copy.

I'm examining if I can do a deal with another party to develop the properties, in exchange for them also funding the build. I would give them x% of the profit.

I'm looking into this as my access to a large amount of funding might be limited.

I would like to know if this is typically allowed in Options (that I make such a deal with a 3rd party). Does it then become a joint venture?

Expert:  Jo C. replied 2 years ago.
This would need to be a three-way agreement between you the owner and the developer or at least then need to be to agreements where one is conditional upon the other and vice versa.
You would need to make sure that there is no bar in the agreement with the property owner of you getting someone else to develop the property.
One of the problems is that the owner may want to do a deal with the developer or at least know who the developer is and in doing so, may want to cut you out of the loop if you do not bring anything to the table other than introducing the parties.
There is no problem legally in doing what you are doing however I would suggest that you do not try to do the agreements on the cheap what you do instruct a commercial solicitor who has experience of dealing with these agreements. Expect to pay at least £1000 and probably more like £2000 plus VAT. It will minimise the chances of things going wrong and will be money well spent if it goes ahead.
Can I clarify anything for you?
Jo
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