Option agreements give prospective purchasers the right to purchase a property at a pre-determined price. This option to purchase will be subject to the terms set out within the agreement and have a specified time scale. At Josiah Hincks, our option agreement solicitors have experience in preparing and negotiating option agreements that are the most suitable for you and your business.
Option agreements are often used in situations where you want to buy or sell a property conditional upon the happening of a certain event meaning that the purchase cannot happen immediately. Option agreements can tie down the buyer and the seller of the property to the deal set out within the agreement.
When drafting an option agreement, there are a few important things to consider, these are:
- The period that the option shall last for. Legally, an option can be granted for a maximum of 21 years, if it is longer than this the agreement becomes unenforceable.
- The price of the option itself. The opportunity to buy a property using an option is often acquired at a cost. This is usually a non-refundable sum of money.
- Whether the option to purchase can be transferred or sold to a third party.
There are also things to consider including within the agreement if the option is exercised:
- How the option can be exercised. Options are usually exercised by notifying the party granting the option in writing.
- The price of the property if the option is exercised.
- Time to complete the sale after the option is exercised.
For more information about option agreements, please contact our commercial property department at your preferred branch: Leicester on 0116 255 1811, Blaby on 0116 264 3430 or Coalville on 01530 835 041.