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Many businesses and landowners want to secure an opportunity to buy or sell land or property at a specified period in the future. Known as an option agreement – this typically occurs where a future purchase is dependent on the fulfilment of a specific condition, such as the granting of planning permission, but they can be structured in different ways.
Option agreements give peace of mind to both buyers and sellers that they are getting a fair deal with no surprises.
For sellers, an option agreement can provide an upfront payment and put an obligation to secure planning permission on the buyer; usually within a specified period. For purchasers of land or commercial property developers, an option agreement provides greater flexibility for business and portfolio planning.
Our highly experienced specialist team of solicitors advise a wide variety of clients on option agreements, including:
- Landowners selling or leasing land
- Developers acquiring land
- Parties involved in disputes relating to option agreements.
We help our clients to consider whether an option agreement is right for their circumstances, and to think through the implications of any conditional terms included in the agreement.
Examples of our work:
Entering into an option agreement with a renewable energy company on behalf of a local landowner, conditional on the grant of planning permission, guaranteeing an annual six-figure rental income.
An option agreement on behalf of two landowners for a residential development site, conditional on the grant of planning permission
Advised on the sale of 333 acres of farmland to two local authorities. The land had potential for development with 1,000 – 1,500 houses. Among other things, we secured an option agreement to secure payment to our clients of a percentage of the sale proceeds paid to the Councils if planning permission were to be obtained and the land sold by them for development. The agreement contained a novel provision for rolling ransom strips designed to secure further payments to our clients if the land were to be sold in phases. The initial sale value was c. £3.3 million with the option potentially securing further, multi-million pound payments.
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