The previous structures in this series, option agreements, conditional contracts and land promotion agreements, all address the same fundamental problem: how to avoid committing the full land purchase price before planning permission is secured.
Deferred consideration works differently, as the buyer acquires the land, but structures the payment so it’s made in stages over an agreed timeline rather than as a single sum on completion.
Development projects generate cash at predictable points, such as when planning permission is granted, when development finance is drawn down, when construction commences and when units are sold.
Traditional land purchase requires you to pay everything up front, before any of those cash-generating events have occurred. Deferred consideration aligns your payment obligations with your projected cash flow and spreads the cost across milestones where money is actually coming in to fund the payments.
