An option agreement is an agreement entered with the owner of a property if you want to buy a property conditional upon the happening of a certain event or if you want to be guaranteed the opportunity to buy a property during a specified period of time or at some future date, then you may enter into what is known as an option agreement with the owner. Under such an agreement, you as the prospective buyer will enter into a contract, which would normally involve the payment of a non refundable sum of money, in exchange for the legal and binding right to buy the property at, or within, some future fixed or ascertainable time period. Option agreements are widely used where a buyer wishes to purchase land only if an event, (usually the granting of planning permission) occurs. Options are versatile and powerful legal instruments which are changing the way residential property is bought, held and sold in the UK.
Put simply, options are written agreements that give the holder choice or freedom. Depending on the wording in the document, the owner gives exclusive freedom to buy, use or sell the property, or a combination of these freedoms. If the buyer chooses to buy whilst the option is in place, the seller must sell.
Generally speaking if the option is subsequently exercised then the initial payment for the option will be credited against the eventual purchase price of the property when the matter is completed, but that is not always the case and such an arrangement will be a matter for negotiation between the parties at the outset. We can assist in the negotiation, preparation and completion of option agreements covering a wide variety of situations and can provide specialist advice on the most appropriate terms and conditions relevant to the land or property in question, draft a confidential agreement, review key documents such as Leases.