An option agreement is a contract between a landowner and a developer where the developer is granted the opportunity to purchase land from the landowner with a certain time frame.

These are often used when a potential buyer of a piece of land wants to ensure that it is not sold whilst they are looking at its planning potential or trying to obtain planning permission. The potential buyer would pay a fee for the option, but would not be under any obligation to proceed with the purchase.

For sellers, an option agreement can provide an upfront payment and may result in an increased value for the land if planning permission is secured by the buyer. There is of course the possibility the developer will choose not to proceed with the purchase, but such a decision is usually constrained to a particular period of time.

For purchasers of land or commercial property developers, an option agreement provides security against a piece of land being sold whilst planning permission is being sought, and greater flexibility for business and portfolio planning.

Our Commercial Property team are experts in this field and able to assist both landowners and developers in implementing option agreements that meet their requirements.

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