What happens if planning is refused under an option or promotion agreement?

This is the question landowners ask most and the one most land companies answer least. Here is the whole of it.

The refusal

The council's decision notice lists reasons. Some are fixable, such as a design or drainage point; some are not, such as the principle of homes on that land. The developer's planning consultant reads the reasons and advises whether an appeal to the Planning Inspectorate (in Wales, Planning and Environment Decisions Wales) would succeed. Appeals take six to twelve months and are paid for by the developer.

If the appeal succeeds

The permission is granted by the inspector and the agreement carries on as if the council had granted it. The period of an option is usually extended automatically to cover the appeal.

If it fails or no appeal is made

The agreement ends on the date it says, which should be soon after the final decision. The developer has lost the money spent; you have lost nothing but time. You keep the land with no charge over it, no debt and no obligation. Some agreements let the developer try again with a different scheme within the period; your solicitor should check whether yours does and whether you are content with that.

What to check before you sign

• That no cost can fall to you on refusal. None.
• How the agreement ends and how quickly the note against your title is removed.
• Whether a second application is allowed and for how long.
• That you can see the appeal advice, so that you know why the decision was taken.

Our agreements say all four in plain words and we go through them with you before your solicitor does. Option and promotion agreements in plain words.