Appointing a development manager: scope, fees and the agreement

A development manager is appointed to act for the owner of a scheme. A short, clear appointment avoids most of the disagreements that arise later: who decides what, what is included in the fee, and when the role ends.

The scope

Set out which stages the appointment covers, for example from appraisal through to planning consent, or all the way to a sale or a start on site. List the main tasks at each stage: appraisals, appointing and managing the consultant team, the planning application, reporting on cost and programme, and the exit. Say what is not included, such as design, planning advice, valuation, legal work or contract administration, which other advisers provide.

How fees are structured

• A monthly fee for a defined period, suited to schemes where the workload is steady.
• A percentage of the build cost or the scheme value, common on larger schemes that run through to completion.
• A fixed fee per stage, such as a fee to reach planning consent.
• A lower base fee with a success payment on consent or sale, which shares the risk and the reward.

Whichever is used, agree what happens if the scheme stops, changes scope or runs longer than planned.

Authority

Agree what the development manager can decide alone, and what needs the owner’s approval: spending above a set amount, appointing consultants, submitting applications, and agreeing terms with buyers or contractors.

Formal roles

The construction and building safety regulations give formal duties to the client, the principal designer and the principal contractor. The appointment should record who holds each role and who carries out the client’s duties on the client’s behalf, so nothing falls between the owner and the development manager.

Reporting and insurance

• Reporting. How often, in what form, and covering cost, programme, risks and the decisions needed.
• Professional indemnity insurance at a level that suits the scheme.
• Conflicts. Whether the development manager or anyone connected to them has an interest in the land, the contractor or the buyer, and how any other fees are disclosed.
• Ending the appointment, by either side, and what is paid if it ends early.

Your solicitor should review the appointment before it is signed. For larger schemes, a standard form of consultant appointment can be adapted.