Simple Option Agreement for Purchase of Land
This Simple Option Agreement for Purchase of Land enables a landowner to grant an option to a buyer. This is a “call option” whereby the buyer can require the seller to transfer the property to the buyer at a later date.
This is a simple form of option agreement. The option may only be exercised in relation to the whole of the land (not part or parts of it).
We have another template, Option Agreement, where the option is to be exercised after the buyer has applied for and obtained a planning permission for development of the property.
The grant of an option is not a straightforward transaction. Sellers and buyers should take legal advice before entering into such an agreement.
Clause 1 contains the grant of the option for the “Option Period”. An “Option Fee” may be payable.
Clause 2 provides for the buyer to have access to the property during the Option Period to carry out investigations and surveys.
Clause 3 sets out the mechanism for exercise of the option. The Standard Commercial Property Conditions (Third Edition) are incorporated in the agreement. These conditions are widely used in commercial property transactions (and are similar to the Standard Conditions of Sale used for residential conveyancing). A copy of the Standard Conditions is available from the Oyez legal stationers website. Unfortunately we are not able to supply the Standard Conditions.
Clause 4 deals with the seller’s legal title to the land.
Clause 5 restricts the seller’s ability to deal with the property (e.g. by selling it or granting leases) during the Option Period.
Clause 6 covers completion of the sale and purchase of the property
Clause 7 deals with notices to be entered on the registered title of the property at the Land Registry.
Clauses 8 and 9 cover VAT and other standard legal matters.
This Simple Option Agreement needs to be signed by each party at the end. The seller and buyer may sign the same copy or one copy each.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
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