Option to buy land and property: in multiple phases
This is a comprehensive agreement that provides for the option holder to buy the land (or any real estate) in a number of phases, as his or her development proceeds. This might give the developer a cash flow advantage, or minimise risk. The document covers conveyancing requirements thoroughly.
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About this document
This agreement is for a single deal where the buyer may achieve a substantial increase in land value but only in stages - for example, a phased development of a residential site.
The effect of phasing the deal in this way is that the land owner receives his or her proportion of the full value but the developer can work piece by piece. This deal allows each party to maximise his or her share. To make it work, the area and location of each proposed phase must be identified on a plan.
This document is suitable for buying any type of real estate, from agricultural land to derelict warehouses.
This agreement includes a detailed contract incorporating the Law Society’s Commercial Conditions (3rd edition), with amendments tailored to this precise deal.
When to use this agreement
Using an option agreement to buy land or property for development allows a developer 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.
You can use this document on any occasion when you need to await a number of events. It could be simply planning consent where staggered applications have been made, or it could be resolution of a dispute, grant of a licence relevant to this land, or simply an offer of financing.
The document also includes an exercise letter template, which can be used by a developer to exercise the option before the expiry date stated within the agreement.
Property options are an area of law in which we specialise. You can find our complete range of agreements here.
- Definitions and interpretation
- Property and option details
- The essence of the agreement
- Easements and reservations
- Sellers warranties covering usual preliminary enquiries
- Buyers warranties as to action he promises to take to enhance value
- A director’s guarantee, in case the seller is a company
- Assignment of the agreement
- limitation of action by seller if buyer defaults
- Various other legal matters
- A separate notice letter to exercise the option
This document was written by a solicitor for Net Lawman. It complies with current English law.
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