Option Agreements With Landowners

Terms, triggers, costs and who pays for the planning application

An option agreement gives you the right, but not the obligation, to buy a landowner's land later, usually once satisfactory planning permission is secured, at a price set by a formula agreed now. This book explains that instrument and why it lives or dies on its wording. It covers the legal ideas behind options, the planning grant that triggers everything, and the clauses at the heart of the book: the option period and trigger, the option fee and who pays for what, the purchase price mechanism, restrictions on the landowner and your access, endeavours, longstop and exclusivity, and overage and VAT. You will see your duties and insurance during the years an option runs, and why tax structure matters so much when the sums are large. The book is clear that these agreements are drafted by specialist solicitors, and it ends with a compliance checklist and the expensive consequences of careless drafting. Next in this series: “A Land Pipeline”.

What’s inside

• The legal framework in plain English
• Permissions, licensing and planning
• The contracts, and what must be inside them
• Insurance, safety and your legal duties
• Tax treatment and choosing a structure
• Your compliance checklist
• Getting this wrong: what it actually costs

Educational material only, not financial, legal or tax advice. Results are not typical and are not a guarantee of income. Freedom Property Academy LTD, registered in England and Wales.