An option agreement is an arrangement between a landowner and a “potential buyer”, such as a developer. The option will detail a set time period known as the “option period”. The length of that period is open to negotiation between parties. If within that option period the potential buyer serves notice on the landowner that he wishes to exercise the option, then that will trigger the operation of a sale and purchase contract (the terms of which are annexed to the option), which will ultimately result in the land being transferred to the buyer. Once the option agreement is entered in to, then if the option is exercised within the option period the landowner MUST transfer the land under the terms of the contract or otherwise face the contractual penalties for failure to do so. Our specialist land development lawyers have dealt with the legal aspects of many option agreements for clients.
Options are often used by developers where they need to buy land from various different landowners in order to create a site and get planning permission for it. That way they can keep their expenditure as low as possible, safe in the knowledge they will only exercise the options once they know they can acquire all the land they need and they will be able to obtain planning permission for it.
If the option is not exercised within the option period, then the option comes to an end.
Our land development solicitors have significant experience in this area of law, and can offer the following services to developers:
Draft option agreements
Review existing option agreements
Advise on the exercise/variation or cancellation of option agreements
A pre-emption agreement is essentially a “right of first refusal”. If a landowner who has entered into a pre-emption agreement with a third party (such as a developer) decides to sell that land, then he must first offer the property to that third party. The pre-emption agreement stipulates that before the property is sold or offered to an independent party, the third party who entered into the agreement must be given the opportunity to decide whether it wishes to purchase the property or not. There is no obligation on the landowner to sell the land, and no obligation on the third party to buy the land. Our team of solicitors based in offices across Essex and London have significant experience in dealing with the legal aspects of pre-emption agreements.
The advantage of a pre-emption agreement is that it provides certainty to the parties. The third party also obtains some comfort that it will be offered the property for purchase first should the landowner wish to sell it.
Our services for developers include:
Draft pre-emption agreements
Review existing pre-emption agreements
Advise on the exercise/variation or cancellation of pre-emption agreements
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