What Is An Option Agreement For Land Purchase

We have another model, Option Agreement, where the option must be exercised after the buyer has applied for and obtained a building permit for the development of the property. The option agreement prevents the landowner from selling the property while the proponent reviews the viability of the project, thereby reducing the risk and potential costs to the developer. The land is only purchased when it is exercised by the buyer, which is based on a trigger event. As a property owner and buying a selling option for you would allow you to profit in a declining market. If the real estate market is slowing down, you are sure of an interested buyer at some point in the future. You will usually receive a non-refundable down payment in exchange for the option. In certain circumstances, the option contract may contain an overrun clause that allows you to recover additional money after the sale closes. For security reasons, you must register an appeal agreement with HM Grundbuch. On the title, a notice on the option contract indicates that the potential buyer has the right to use the land if the event based on the event takes place to execute the option.

In the case of an option to purchase, the performance of the contract is encouraged by the seller, so the buyer has no exerciseable rights on the land, so there is no reason to register this type of option agreement. Option agreements and over-engineering agreements can be positive for both the landowner and the buyer, but there are potential pitfalls that require careful navigation. If you need advice, please contact a member of our Commercial Property team. The public sector often refers to the “recovery” overload in which, if they sell land at a discount, this discount can be “applauded” when certain “trigger” events occur later. The versatility of the options also means that certain strategies allow you to profit in a static market. For example, if you sell a put option, if you feel that the price of the underlying land remains stable or, at the very least, does not fall dramatically, you can include premium income.

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