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Our expert commercial property solicitors can help will all aspects of option agreements. You can contact our team of professionals via the contact form below or by calling:
An option agreement is a contract between a residential or commercial property owner and a prospective buyer that grants the buyer the option to purchase the property within a set period, usually at a certain price. The buyer is not usually obliged to proceed with the purchase of the property if they decide that they do not wish to do so.
Option agreements typically last between 3-5 years, meaning property owners can be prevented from selling the land to anyone else for long periods, and agreements can also include the right to extend the time. Long extensions can be burdensome on the property owner, particularly when there is no sale guarantee to the prospective buyer who has tied up the property.
There is a range of transactions where an option agreement may be used. Option agreements are particularly popular with commercial and residential developers who want to secure potential sites due to the ongoing shortage of commercial and residential land available for development in the UK.
Option agreements can also be used, for example, by a tenant leasing property from a landlord who would like to be able to purchase the freehold of the property at a future date if their business proves to be successful.
Property owners should seek legal advice if they are approached by a prospective purchaser proposing to enter into an option agreement. Purchasers are often willing to pay for the property owner’s legal costs to incentivise them to enter the deal.
Key points for consideration include:
There are also likely to be site-specific considerations, particularly if the property owner is retaining part of the property and may need to reserve rights over the land being transferred under the option agreement. The installation and future maintenance of boundary features such as fences and gates must also be considered.
The solicitors in our Real Estate team can assist with negotiating and exchanging option agreements. We can also recommend surveyors to assist you with the valuation of your property or land to help ensure that you are being offered reasonable terms.
Our expert commercial property solicitors can help will all aspects of option agreements. You can contact our team of professionals via the contact form below or by calling: