Option Agreements Over Land
The documents in this folder are for use by landowners and property buyers (including developers). The folder contains Option Agreements and an Option Notice.
These templates can be used where a buyer wants to acquire land at some point in the future. The landowner grants the developer an option that can be exercised at any point during a defined “option period”.
It may be that the buyer intends to redevelop the land. In such a case, the parties may choose to use the template which includes obligations on the buyer to obtain planning permission before the option is exercised.
The grant and exercise of options over land is a legally complex area. These documents should be used by customers who fully understand their nature and effect. Professional advice is likely to be required.
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Frequently Asked Questions
I want the right to buy a piece of land later, maybe after getting planning. Which document does that? +
An option agreement over land. The landowner grants you the right to buy at any point during a defined option period, so you can secure the site now and decide whether to proceed later. This folder includes an option agreement with obligations to obtain planning permission first, plus an option notice you serve to exercise the option when you are ready.
How do I make sure the option still binds the land if the owner sells to someone else? +
Protect it on the title. An option is an estate contract, and to bind a later buyer of the land it must be registered: enter a notice against the registered title, or for unregistered land register a Class C(iv) land charge. Leave it unprotected and a purchaser of the land may take free of your option, so register it as soon as it is granted.
What is the difference between a call option and a put option? +
A call option gives the buyer the right to require the owner to sell. A put option gives the owner the right to require the buyer to purchase. Developers most often use a call option to control if and when they buy. Some deals combine both so either side can trigger the sale. Be clear which you are granting, because they put the choice in different hands.
Can I make exercising the option conditional on getting planning permission? +
Yes. This folder includes an option agreement designed for redevelopment, where the buyer takes on obligations to pursue planning permission and the option is geared to being exercised once permission is obtained. It lets a developer carry the planning risk while keeping the land secured. Options over land are legally complex, so take professional advice on the conditions and timing.
