Louise Norris, partner in our commercial property team, explains what an option agreement is and why the parties to the purchase of land want an option. Answer “Yes” if this transaction is the result of an option exercised. An option agreement also offers flexibility with regard to timetables, which is currently a central consideration. Options are often designed to allow the developer to exercise his ability to acquire the country at any time during the option period. This allows developers to choose the best time to exercise the option so that they take into account things like planning, availability of development financing and the ability to work in the field once the acquisition is complete. In addition, the options have the advantage for landowners that land can be sold at an improved operating value without having to pay for planning. If the option is exercised, the transfer tax is levied on the transfer contract. Under Section 23 of the Duties Act 2001, a tax credit paid on the option is authorized if the option agreement stipulates that the option commission is part of the consideration. A land has a higher market value after a dwelling house has been built on it. Often, in addition to the option contract, an overspend agreement would be negotiated, so that if the land were to appreciate significantly after the land had evolved, the seller could, once completed, obtain an additional payment calculated on the added value.

Is the transaction in accordance with the pre-option agreement? I can`t move around this question, can anyone explain it??? One option usually includes 2 transactions – the option agreement and the property transfer agreement as soon as the option is exercised. They are assessed separately, with fees calculated on the basis of the consideration mentioned in each agreement. An option contract is an agreement between a landowner and a potential buyer (developer) of the landowner. When the parties enter into the contract, an agreed payment is often made to the owner of the land and, in return, the buyer receives a first contractual option for the acquisition of the property. The purchase must be made within the option period (which may take several years) or as a result of a trigger event, such as. B issuing a building permit for development.