Option to buy land and property: extension of term subject to conditions

This option agreement provides for extending the exercise term subject to any condition you require, such as a delay in a local government decision to upgrade a road, for an additional consideration. It is suitable for deals in any type of land or property. It is a comprehensive version that covers conveyancing requirements thoroughly, and that incorporates a specially edited version of the Law Society Commercial Conditions of sale.

Suitable for use in: England & Wales and Scotland
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About this option agreement

Using an option agreement to buy land or property for development allows a buyer to minimise risk, whilst at the same time providing the seller with a payment regardless of whether the buyer exercises the option. It can help incentivise a property owner to cooperate in securing the future event the developer is seeking and, depending on the sale price agreed, let the buyer buy at a discount to future market value.

However, sometimes the future event that increases the value of the property doesn’t occur as quickly as originally envisaged. In these situations, often the option expires and the option holder loses the right to buy. This template mitigates against this risk by giving the option holder the right to extend the option exercise term at any point in return for an additional payment to the seller.

When to use this option agreement

This template differs from others Net Lawman offers in that the extension of the option exercise period lasts until an agreed event happens. The buyer may be concerned that a fixed extension period may be quite impossible to calculate. The only way he can cover himself is to have an extension as long as one or more conditions may be outstanding.

In this way the seller receives more money in return for extending the term, but the buyer does not have to put out more money than necessary to secure the deal in circumstances where he may not be able to control the timing of events.

You might use this agreement for buying land or buildings with a view to development before:

  • local government has decided to build infrastructure (such as a new road or rail link) in the area
  • a company has decided to create a new distribution centre nearby, creating jobs in the area
  • a geological or archaeological survey has been completed

This agreement can be used for securing an option on any type of land and/or buildings, and with a view to buying the property for any reason.

These might include:

  • house building
  • redevelopment of light industrial buildings
  • refurbishment of offices

The document also includes an exercise letter template, which can be used by a buyer to exercise the option before the expiry date stated within the agreement.

Alternative templates

Property options are an area of law in which Net Lawman specialises. You can find our complete range of templates at: Property option agreements.

Option agreement application and features

  • Sets out a clear and logical pathway for exercise of the option
  • All variables are clear and in one place
  • Suitable for a variety of land types and situations
  • Includes an exercise letter template
  • Incorporates the standard commercial contract terms of the Law Society’s Commercial Conditions, with amendments tailored to this precise deal
  • User friendly: includes invaluable user notes to guide you through to successful execution

Agreement contents

  • All the variable matters in one place for ease of completion
  • The essence of the agreement
  • Calculation of price or additional price or extended option
  • Registering the option and HM Land Registry
  • Provision for buyer to nominate the purchase to someone else
  • Buyers warranties
  • Sellers warranties as to the current planning status of the land
  • Confidentiality
  • Indemnities
  • A director’s guarantee, in case the seller is a company
  • Inclusion of any unregistered rights over adjacent land
  • A separate notice letter to exercise the option
Draftsman

This document was written by a solicitor for Net Lawman. It complies with current English law.

UK-PRopt02 - Option to buy land and property: extension of term subject to conditions (Suitable for use in: England & Wales and Scotland)

 
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