Option to buy land and property: extension of term subject to conditions
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- Plain English makes editing easy
- Guidance notes included
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About this document
Using an option agreement to buy land or property for development allows a buyer to minimise risk that a critical event for the success of the project might not occur, whilst at the same time providing the seller with a payment regardless of whether the buyer exercises his or her option.
It can help incentivise a property owner to cooperate in securing the future event the developer is seeking and, depending on the sale price agreed, let the buyer buy at a discount to future market value.
However, sometimes the future event that increases the value of the property doesn’t happen as quickly as originally envisaged. In these situations, often the option expires and the holder loses the right to buy. This template mitigates against this risk by giving the holder the right to extend the exercise term at any point in return for an additional payment to the seller.
When to use this document
This template differs from others Net Lawman offers in that the extension of the exercise period lasts until an agreed event happens. The buyer may be concerned that a fixed extension period may be quite impossible to calculate. The only way he can cover himself is to have an extension as long as one or more conditions may be outstanding.
In this way the seller receives more money in return for extending the term, but the buyer does not have to put out more money than necessary to secure the deal in circumstances where he may not be able to control the timing of events.
You might use this agreement for buying land or buildings with a view to development before:
- local government has decided to build infrastructure (such as a new road or rail link) in the area
- a company has decided to create a new distribution centre nearby, creating jobs in the area
- a geological or archaeological survey has been completed
This agreement can be used for securing an option on any type of land and/or buildings, and with a view to buying the property for any reason.
These might include:
- house building
- redevelopment of light industrial buildings
- refurbishment of offices
The document also includes a letter template that can be used by a buyer to exercise the option before the expiry date stated within the agreement.
Application and features
- Sets out a clear and logical pathway for exercise
- All variables are clear and in one place
- Suitable for a variety of land types and situations
- Includes an exercise letter template
- Incorporates the Law Society’s Conditions of Sale (2017 Edition).
- User friendly: includes invaluable user notes to guide you through to successful execution
- All the variable matters in one place for ease of completion
- The essence of the agreement
- Calculation of price or additional price or extended option
- Provision for the buyer to nominate the purchase to someone else
- Buyer's warranties
- Seller's warranties as to the current planning status
- A director’s guarantee, in case the seller is a company
- Inclusion of any unregistered rights over adjacent land
- A separate exercise notice letter
This document was written by a solicitor for Net Lawman. It complies with current Irish law.
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