Option to buy land and property: extension of term; non-assignable
This option agreement is a version of our standard agreement that additionally includes paragraphs allowing the option buyer to extend the term of the option in return for an additional payment when he does so. It is therefore useful in situations where timing is uncertain. It does not include assignment provisions. The agreement is written in plain English.
About this agreement
This template creates a call option for buying land and/or buildings. The buyer buys the right to buy the property at a given price within a certain period of time. This document also includes a provision for the extension of the option exercise period in return for an additional payment to the seller.
When to use this option agreement
Using an option agreement to buy 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 buyer is seeking and, depending on the sale price agreed, let the buyer purchase at a discount to future market value.
This document is likely to be used in situations where an event for which the option holder is waiting (such as grant of planning permission) could be delayed, and the holder wants to reduce the risk that the option term might end before the event.
You might use this agreement for buying land or buildings with a view to development before:
- planning permission (or other licence) has been granted
- finding a tenant
- negotiating with a local authority for a change in status of a listed part
- a land or building survey has been completed
- financing has been secured
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 offices
- refurbishment of light industrial units
- development of a shopping arcade
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.
If you require an option agreement that includes provision for extension of the term and clauses relating to assignment, then see Option to buy land and property: extension of term; assignable.
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
- Short and simple: all variables are clear and in one place
- Suitable for a variety of land types and situations
- Includes an exercise letter template
- User friendly: includes invaluable user notes to guide you through to successful execution
- Includes provision to extend the period in which the option can be exercised
- 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
- 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
This document is drawn by Net Lawman lawyers to comply with current English law.
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