Option agreements - which give prospective purchasers a right to buy a property at a predetermined price within a specified timescale, have been used to good effect by both landowners and developers for many years.
For landowners it generally means receiving some money ‘up front’ together with a commitment from the developer to promote land and for development. For the developer, in return, it means securing an opportunity and reducing risk and, if successful, a right to purchase at a pre-agreed price which very often represents a discount against market value.
The length and terms of an option agreement are matters for negotiation and require very careful consideration. The commercial terms, such as how much money, when and on what basis – are closely linked to the legal structure and workings of the agreement and cannot be considered in isolation. The implications of completing an ill conceived or poorly negotiated option agreement are profound. Accordingly, the advice of a specialist in this complex area should be obtained before entering into negotiations.
The team of specialist planning and development consultants at Kirkby & Diamond has the skills base and the experience and has successfully negotiated and completed option agreements for land owners and developers throughout the region.
The valuation of land under option consequent upon service of a Price Notice Procedure (or any other mechanism) and the interpretation of the enabling provisions and trigger events are matters upon which the team at Kirkby & Diamond is regularly asked to advise on. The firms experience in this area is such that its partners are regularly appointed as joint expert valuers to assist in the resolution of disputes.