An Option Agreement

Option agreements have been successfully used by many farmers and landowners when collaborating with developers who are looking for a building permit for renewable or residential energy projects. The conclusion of an option contract does not guarantee a sale at the end of the option period. This is a risk for the landowner, since he has entered into an agreement for several years preventing the owner from selling the property to other interested parties, without guarantee of sale at the end of the option period. The options are extremely versatile instruments. Traders use options to speculate. This is a relatively risky investment practice. In the case of speculation, buyers and authors of options have conflicting views on the performance prospects of an underlying security. Others use options to reduce the risk of holding an asset. As a landowner, you can use the skills, knowledge and means of an experienced developer. Since most options are “take” options, unless there is a sharp slowdown in the market or the conditions imposed by planners on a successful deal are too onerous for the developer to continue, you can be sure of an interested buyer at some point in the future. Landowners often confuse option agreements with pre-emption agreements.

The latter only give the interested buyer the right of pre-emption if the seller opts for the sale, while an option agreement is a legally binding contract. In other words, if you manage to conclude the event on which the execution of the option depends, for example. B upon receipt of the building permit, you will have to sell your land, even if other circumstances have changed. That`s why good wording is so important. An option agreement is an agreement between the owner and a potential buyer. This signed document indicates that the potential buyer pays a deposit and receives a set period of time to be the first buyer to obtain the right to purchase the property at a set price. Backing up an option agreement also reduces the risk for the developer. If obtaining the building permit takes longer than expected, the developer can be sure that he has a legally binding agreement that will prevent you from getting frustrated and changing your mind about this whole matter. There are many more things to keep in mind than those mentioned above. Don`t expect all your concerns to be taken into account when the option is designed. By then, it may be too late.

Things like overtaking, for example, are incredibly complex and need to be handled by an expert. With accurate design, option agreements and can offer both developers and landowners security, no matter how unpredictable the future is. Impact on uninsased land: Sometimes a developer wants to buy the country in several stages (phased development). . . .