Option agreements
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Contact our teamAn option agreement is a valuable legal tool that grants one party the right, but not the obligation, to purchase or sell property at a future date.
This arrangement provides flexibility and security, allowing a buyer to explore development potential or financing options before committing to a full purchase while giving the seller the assurance of a potential transaction down the line. Whether you’re looking to secure land for future development or simply need time to arrange the logistics of a deal, option agreements offer a practical solution.
At Moore Barlow, we understand that property transactions can be complex, particularly when planning ahead. Our experienced solicitors provide expert advice and guidance to ensure that option agreements are tailored to meet your specific goals while safeguarding your legal position.
What is an option agreement?
An option agreement is a contract that allows a buyer the exclusive right to purchase property within a specified time frame, often at a pre-agreed price or based on certain conditions being met. This type of agreement is particularly useful in situations where the buyer needs time to secure planning permission, financing, or to assess the property’s potential value. The seller, in return, benefits from a binding commitment that the property will not be sold to another party during the option period, ensuring a future sale could take place if the buyer exercises their right.
Unlike a standard sale, an option agreement provides flexibility. The buyer is not obligated to complete the transaction but has the option to do so under the agreed terms. This makes it a powerful tool in land acquisitions, development projects, and investment strategies.
Richard Hughes
Partner | Commercial Property, Real Estate, Real Estate Finance
How we can assist with option agreements
At Moore Barlow, we take a bespoke approach to drafting and negotiating option agreements, ensuring that the terms are clear, fair, and aligned with your business or personal objectives. We work closely with both buyers and sellers, offering practical advice on the potential risks and benefits, and tailoring the agreement to reflect your specific needs.
For buyers, we ensure the agreement gives you sufficient time to conduct due diligence, secure necessary permissions, or arrange financing, while protecting your right to complete the transaction under favourable terms. For sellers, we ensure that the agreement provides the necessary security and clarity regarding timelines, conditions, and payment terms.
Why our approach stands out
Moore Barlow’s deep experience in property law ensures that your option agreement is carefully structured to prevent disputes and protect your interests. We understand that no two property transactions are alike, which is why we offer tailored solutions that reflect the unique circumstances of each deal.
Our team’s attention to detail and clear communication ensure that both parties are fully informed about their rights and obligations, reducing the risk of misunderstandings. We are proactive in addressing potential challenges early in the process, making sure the agreement is legally sound and enforceable.
Meet our real estate finance experts
Richard Hughes
Partner | Commercial Property, Real Estate, Real Estate Finance
Jo Farr
Partner | Commercial Property, Real Estate, Land Development, Real Estate Finance
Susannah Marsh
Partner | Financial Services Litigation, Real Estate Finance
Sam Ho
Senior Associate | Commercial Property, Real Estate, Real Estate Finance
Nellie van der Lande
Senior Associate | Commercial Property, Landed Estates and Farming, Real Estate Finance, Rural Services
Callum Leary
Partner | Commercial Property, Real Estate, Real Estate Finance
Sharon Mays
Senior Associate | Commercial Property, Real Estate, Land Development, Real Estate Finance
Who we help
We assist a wide variety of clients, including developers, investors, landowners, and commercial buyers, who use option agreements as a strategic tool in their property transactions. Whether you are securing land for a future development project or selling a property while awaiting certain conditions to be met, we provide the legal expertise to help you navigate the complexities of option agreements.
Our services are particularly beneficial for those involved in long-term projects or developments that require careful planning and flexibility. We also work with clients in both residential and commercial property sectors, ensuring that your agreement is perfectly suited to your specific objectives.
Contact us
If you’re considering an option agreement for your property transaction, or if you need legal advice on how to draft or negotiate the terms, Moore Barlow’s team of experienced solicitors is here to help. Contact us today to discuss your requirements and discover how we can guide you through the option agreement process, ensuring that your interests are fully protected.
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Frequently asked questions
What is the purpose of the option agreement?
An option agreement gives a potential buyer the right, but not the obligation, to purchase a property or land within a specified period at an agreed price or under predetermined terms. This allows the buyer to secure an opportunity while conducting due diligence, such as planning permissions or financing arrangements, without committing to the purchase.
For the seller, it offers a future sale option, often with a non-refundable fee from the buyer for the exclusive right. Option agreements provide flexibility and security, balancing the interests of both parties in a potential property transaction.
What are the disadvantages of an option agreement?
One disadvantage of an option agreement is the uncertainty it creates for the seller, as the buyer is not obligated to complete the purchase. Additionally, the property may be tied up for a set period, preventing other potential deals. Option fees paid by buyers are often non-refundable.
How does an option contract work?
An option contract gives the buyer the exclusive right, but not the obligation, to purchase a property within a specified time frame. The buyer typically pays an option fee for this right. If the buyer exercises the option, the sale proceeds under the agreed terms; if not, the agreement expires.
Can I get out of an option agreement?
Exiting an option agreement depends on the terms of the contract. Generally, the buyer can choose not to exercise the option, allowing the agreement to lapse. However, once signed, option fees are usually non-refundable, and the seller may be bound to honour the option.
Are option agreements legally binding?
Yes, option agreements are legally binding. They grant the buyer the exclusive right to purchase within a specified period, provided they meet agreed conditions, while the seller cannot sell to others during this time. Both parties must adhere to the terms once signed.
How long does an option agreement last?
An option agreement typically lasts between 6 months to 3 years, but the duration can be tailored to suit the needs of both parties. The length is agreed upon when the contract is signed, allowing the buyer time for due diligence, such as securing planning permission or financing.
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