Option Agreement Solicitors

With one of the UK's largest, most popular and most experienced property law teams, we offer far more than standard conveyancing.

Our experienced lawyers spot the opportunities and mitigate the risks. Option agreements are a good example of an area where having the right lawyer often makes a huge difference.

When to consider an option?

An Option Agreement may be commercially appropriate where a potential buyer considers that the value of the land is significantly dependent on obtaining planning permission which is not currently in place.

A buyer/developer will commit, via an option agreement, to buy if planning is successfully obtained.

What will the buyer want included in option agreement?

Key issues from the buyer perspective will include :-

• Price Certainty - clear price calculation mechanism with caps on any increase provisions, protection against excessive increase during option period.

• Planning - sufficient time to obtain planning permission, seller cooperation obligations, ability to extend period if planning delayed.

• Property Access - full rights to enter for surveys, planning-related activities and investigations.

• Deposit Protection - circumstances when deposit refundable clearly stated, protection mechanisms for larger deposits.

• Conditionality - clear conditions for option exercise, including minimum planning permission requirements.

• Assignment - rights to assign to group companies or development vehicles.

• Exclusivity - preventing seller from marketing or negotiating with others during option period.

What will seller want included in an option agreement?

From a seller perspective options should not be given lightly and there is often a lot to negotiate and include in an option agreement such as :-

• Option Period - strict timeframes for exercise, with clear start/end dates and any extension provisions requiring additional payment

• Payment Terms - substantial non-refundable option fee upfront, clear deposit requirements on exercise, and payment timing

• Planning Conditions - obligations on buyer to pursue planning promptly, seller approval rights over applications, and information sharing requirements

• Property Protection - restrictions on buyer's activities during investigations, repair obligations, and indemnities for damage

• Termination Rights - clear triggers for seller to end agreement if buyer defaults or breaches conditions.

Please do get in contact to discuss how we can help you.