How does selling land subject to planning permission work?

Short answer: The parties sign a legal agreement before the planning outcome is known. Completion—or a right to purchase—then depends on the wording of that agreement and the permission obtained.

Why use a planning-dependent agreement?

It can allow planning risk and expenditure to be addressed before the land changes hands. A developer may fund agreed professional work while the landowner retains ownership during the planning process. This does not guarantee permission or a sale.

What should be defined?

• The land and any access or service routes included.
• The planning objective and what counts as a satisfactory permission.
• Who appoints advisers and controls the application or appeal.
• Which costs are funded and whether any can be recovered.
• The agreement period and any extension rights.
• The price mechanism, valuation assumptions and dispute process.
• Rights of access for surveys and site investigations.
• Termination events and the treatment of planning material.

Conditional contract or option?

Under a conditional contract, both parties are generally committed to complete once the stated conditions are met. An option normally gives the developer a right, rather than an absolute obligation, to buy within the option period. Exact drafting matters more than the label.

Planning control and communication

A well-drafted agreement should describe consultation with the landowner, the ability to amend a scheme, how appeals are treated and what information must be shared. Planning proposals often evolve in response to technical evidence and local-authority feedback.

Independent advice is essential

The landowner should use a solicitor experienced in development land and consider independent valuation and tax advice. ARM Developments does not advise landowners on whether an agreement is in their personal legal or tax interests.

Explore our option agreement introduction, comparison of acquisition routes and assessment process.