Option Agreements
An Option Agreement provides a Developer with the ability to purchase a specific area of land following the grant of a satisfactory planning permission for development.
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Option Agreements
Our specialist lawyers are experienced in acting for either the developer or the landowner, alongside other professional advisers.
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A full investigation of the property and easement titles are essential and a developer will want to know whether there are any restrictions or other matters (such as an occupational lease) contained within the titles, which will prevent or interfere with the intended development. Additionally, pre-contract development enquiries and full commercial search due diligence must be carried out prior to entering into the Option Agreement to ensure that there are no adverse entries revealed which could affect the proposals to develop the land.
It is important to establish whether the land is subject to the payment of VAT and understanding how this can affect the terms of an agreement between the parties. The Option Agreement should contain provisions for the treatment of VAT.
Frequently Asked Questions about Option Agreements
How long does an Option Agreement last?
An Option Agreement to purchase land will last for as long as is stipulated in the contract. Typically, this is around 5 years but it can be for a longer or shorter period of time depending on the land and the parties involved.
When must an Options Agreement be signed?
An Option Agreement becomes legally binding once both parties have signed the agreement and an option fee has been paid to secure the option on the land or property.
Are Option Agreements binding?
Yes, once an Option Agreement has been signed by both parties and the Option Agreement fee has been agreed then the contract is legally binding.
Is an Option Agreement a contract?
Yes, an Option Agreement is a legally binding contract between two or more parties which sets out the stipulations for the sale/purchase of land or property.
What is an Option Agreement property?
An Option Agreement property is a property or piece of land that will have an Option Agreement against it, allowing for the future purchase/sale of that property at an agreed price.
What is the process of an Option Agreement?
Once a potential land buyer has approached the land owner and suggested an Option Agreement, a contract is then drawn up specifying the length of the Option Agreement, the option fee and the purchase price of the land under the Option Agreement. The contract becomes legally binding once the agreement is signed by all parties.
Contact the Franklins Land Development team
If you have any questions about option agreements, please don’t hesitate to contact our team of experts who are on hand and ready to help you.
