Subject-to-planning contracts: how conditional land sales work

What is a subject-to-planning contract?

It is a contract for the sale of land that is exchanged now but only becomes unconditional when a planning condition is met. Both sides are committed: you cannot sell to anyone else while the contract is live, and the buyer must complete if a satisfactory permission is granted within the agreed time.

The main difference from an option agreement is commitment. Under an option, the buyer can choose whether to buy; under a conditional contract, it must buy once the condition is satisfied. The price is usually fixed, or set by a formula, at exchange, which gives you more certainty about what you will receive.

The planning condition is not always the only one. Some contracts are also conditional on satisfactory surveys, utility connections, vacant possession or a highways agreement. Each extra condition is another way for the sale not to happen, so ask why it is needed and make sure each has a clear test and a deadline.

How does a conditional sale work, step by step?

1. Heads of terms are agreed: price, deposit, the planning condition, timescales and who pays which costs.
2. Solicitors check the title and negotiate the contract, and the buyer may carry out initial surveys.
3. Contracts are exchanged and any deposit is paid.
4. The buyer prepares and submits the planning application, consulting you where the contract requires.
5. The council decides. If it refuses, the buyer may appeal or resubmit if the contract allows.
6. Once a satisfactory permission is granted and the challenge period has passed, the contract becomes unconditional.
7. Completion follows within an agreed number of days, and the balance of the price is paid.

Our guide to going from offer to completion explains the legal steps in more detail.

Is there a deposit?

Often, but not always. Deposits on conditional contracts tend to be smaller than on an unconditional sale, because the buyer may never complete. Some contracts include a non-refundable payment on exchange, or further payments at milestones such as submission of the application.

Ask what happens to any deposit if the condition is not met by the longstop date. Whether it is returned to the buyer, kept by you or split should be written clearly into the contract, along with who holds it in the meantime.

Ask too whether the price can be reduced before completion. Some contracts allow the price to fall if the permission is for fewer homes than expected or if surveys find abnormal costs. Any such adjustment should be capped and based on evidence, not left open.

What counts as ‘satisfactory planning permission’?

This definition is one of the most important parts of the contract. It sets out the permission the buyer needs before it has to complete, and the buyer will usually want the right to reject a permission that falls short of it. Typical points include:

• the type of permission, outline or detailed, and the minimum number of homes or floor area;
• no conditions that are unduly onerous, often defined by cost or by reference to the scheme applied for;
• section 106 obligations and Community Infrastructure Levy within agreed limits;
• affordable housing no higher than a stated level.

From your side, the definition should be objective and not so wide that the buyer can walk away from any permission it no longer likes. Disputes about whether a permission is satisfactory are often referred to an independent expert.

The contract should also oblige the buyer to submit the application by a set date, to pursue it diligently and to keep you informed. You may want the right to see and comment on the application before it goes in, particularly if you are keeping neighbouring land.

Why wait for the judicial review period?

Once permission is granted, third parties can challenge it in the High Court. In England and Wales, a claim for judicial review of a council's planning decision must be filed within six weeks after the grounds arose. A decision made on appeal can be challenged under section 288 of the Town and Country Planning Act 1990, also within six weeks.

Buyers and their lenders usually will not complete until that period has passed without a challenge. Contracts often add a short buffer for late service of proceedings, and should say what happens if a challenge is made, including whether the buyer must defend it and whether the longstop date is extended.

What happens if the council refuses permission?

Many conditional contracts give the buyer the right, and sometimes the obligation, to appeal, occasionally subject to advice from a planning barrister that an appeal has reasonable prospects. In England, appeals go to the Planning Inspectorate; in Wales, to Planning and Environment Decisions Wales. For most applications the deadline is six months from the decision notice in both countries.

The contract should also say whether the buyer can submit a revised application instead, and who decides which path to take. An appeal or resubmission can add many months, which is why the longstop date matters so much.

It is also worth agreeing who pays the costs of an appeal and whether you have any say in the decision to appeal. If the buyer chooses not to appeal, you may want the contract to end promptly so the land is freed up, rather than waiting for the longstop date.

What is a longstop date and why does it matter?

The longstop date is the final date for the condition to be satisfied. If permission has not been secured by then, either party can usually end the contract. A longstop protects you from having your land tied up indefinitely.

It should allow realistic time for an application, an appeal and the challenge period, but not so much that a slow buyer is rewarded. Some contracts allow extensions while an appeal or legal challenge is pending, subject to an absolute final date that cannot be moved.

From 6 April 2027, buyers holding conditional contracts over registered land in England and Wales will also have to report them to HM Land Registry under the Provision of Information (Contractual Control) (Registered Land) Regulations 2026, including contracts made on or after 8 June 2026. The duty falls on the buyer, but you may be asked for some details about yourself before exchange.

When does a conditional contract suit a landowner?

It suits sites where planning looks achievable in the short to medium term, such as land within or next to a settlement, brownfield sites, or sites with lapsed or refused permissions where the issues are well understood. You get a committed buyer and a known price, while the buyer funds and manages the planning work.

It is less suited to land that needs years of promotion through a local plan, where an option usually fits better, or to owners who need money quickly, who may prefer an outright sale at a price that reflects the planning risk.

We buy on this basis – see subject-to-planning purchases – and, as with any contract, you should have your own solicitor review it before exchange. Speak to a tax adviser about timing too, because when and how a sale completes can affect your tax position.

Questions

Sources

• Civil Procedure Rules Part 54 – judicial review (Ministry of Justice)
• Town and Country Planning Act 1990, section 288 (legislation.gov.uk)
• Appeals – guidance (GOV.UK)
• What to do if your application is refused or delayed – Wales (Planning Portal)
• Planning and Environment Decisions Wales (GOV.WALES)

This guide is general information, not legal, planning or tax advice. Always take independent professional advice on your own circumstances.