Backing up an option agreement also reduces the risk to the developer. If the issuance of the building permit takes longer than expected, the developer can be assured that he has a legally binding agreement that will prevent you from being frustrated and changing your mind on the whole issue. An option agreement is a contract by which a company gives a buyer the opportunity to buy new shares in the future. An option contract is an agreement between a landowner and a potential buyer (developer) of the landowner. When the parties enter into the contract, an agreed payment is often made to the owner of the land and, in return, the buyer receives a first contractual option for the acquisition of the property. The purchase must be made within the option period (which may take several years) or as a result of a trigger event, such as. B issuing a building permit for development. Duration: A typical option agreement is three to five years, but it can be extended or extended if a developer`s planning application is underway. Therefore, you should think about the impact that a lengthy planning process can have on your farm plans and whether you are entitled to additional payments if it takes longer than expected. A timetable for the promoter`s commitments should be included so that both parties are clear about what is expected and when. 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. Case law differs from jurisdiction to the jurisdiction, but an option contract can be established either implicitly at the beginning of the benefit (the view restatement) or according to an “essential benefit.” Cook v. Coldwell Banker/Frank Laiben Realty Co., 967 S.W.2d 654 (Mo. App. If you wanted to sell your property on the market for a risky period and a developer came, asked you if you wanted to sign an option contract, it would guarantee a potential sale and also relieve some stress for the potential buyer. Since the options are future property orders, they are generally subject to duration in common law countries and must be exercised within the statutory time frame. In the above scenario, the modern view of how option contracts are applied now provides security for those who promise.  Essentially, as soon as a promise begins to materialize, an option contract is implicitly established between the promise giver and the promised.