We are able to advise whether you are a Developer or a Land Owner. Options and Conditional Contracts are specialist documents commonly used by Developers who are speculating on developing a piece of Land but need Planning Permission to make the deal profitable and attractive to them
What is an Option?
An Option is more informal than a Conditional Contract.
The Developer will pay the Land Owner a small premium to secure an Option to buy the Land from the Land Owner.
The Option is for a fixed period, but often can be extended.
The Option will be registered at the Land Registry and so appear on the Land Owner’s title
The Developer then decides whether to make a Planning Application to obtain a Planning Permission to develop the site.
If the Developer obtains a Planning Permission before the end of the Option period then the Developer can “Exercise its Option” and purchase the Land from the Land Owner
If the Developer fails to obtain a Planning Permission by the end of the Option period then the Option ends.
The Developer should then remove the note of its Option from the Land Registry.
Areas of concern with Options
Whether you are a Land Owner or a Developer it is vital that you take Legal Advice about what the Option means to you.
Ellis Jones’ Commercial Property Team will work with you to ensure that you are fully aware of what the Option means and that there are no hidden surprises.
What is a Conditional Contract?
A Conditional Contract is more formal than an Option.
A Conditional Contract will have a date by which the Land must be purchased but normally this date can be changed by agreement
A Conditional Contract will oblige the Developer to make a Planning Application for Planning Permission by a deadline.
A Developer will normally register the Conditional Contract with the Land Registry and so appear on the Land Owner’s title.
If Planning is granted the Conditional Contract will usually become binding and the Sale of the Land to the Developer will complete.
If Planning is not granted the Conditional Contract is not binding and the Contract ends
The Developer should then remove the note of the Conditional Contract at the Land Registry
Areas of concern with Conditional Contracts
As with an Option it is vital that you take Legal Advice about a Conditional Contract and what it means to you whether you are a Land Owner or a Developer.
Ellis Jones’ Commercial Property Team has a wealth of experience in dealing with Conditional Contracts and will work with you to ensure that you enter into the Conditional Contract with your eyes open
What is a Lockout?
A Lockout is an agreement between a Land Owner and potential Buyer.
The Lockout prevents the Land Owner from selling to anyone other than the Buyer for a fixed period of time.
This allows the Buyer to research whether it is worth buying the Land.
A Lockout is not usually registered with the Land Registry
A Lockout is commonly used when the Buyer has to spend small sums of money in reaching a decision as to whether or not to buy.
Areas of concern with Lockouts
A Lockout does not force a Landowner to sell or a Buyer to buy. So it is not often the right type of agreement for either a Landowner or a Buyer
Ellis Jones’ Commercial Property Team will be able to help you decide what is the best form of Land Agreement for you to reach your goals.
For all of your commercial property needs please contact:
Charminster: 01202 636227
Canford Cliffs: 01202 709898
or email: commprop@ellisjones.co.uk
