With a growing number of landowners across the North West looking to sell their land for development, it’s important to gain an understanding of the options that are available. For landowners to be able to realising the maximum value from the land, seeking advice and professional representation can pay a key role.
Option Agreements are one such method and are a relatively common means of structuring land deals.
What is an Option Agreement?
An Option Agreement is a legal agreement between a landowner and a developer. The contract gives the developer the right to purchase the land at an agreed price at any time during an agreed ‘option period’ in return for an ‘option fee’.
One benefit of an Option Agreement is that the landowner takes no part in the process of applying for planning permission, with the developer doing this at their own cost and risk. Option Agreements allow landowners to propose their land for development with very little involvement in the planning process.
When is an Option Agreement suitable?
An Option Agreement is suitable for landowners who want to reduce their involvement in the often long and intense planning application and approval process. Landowners can therefore take a back seat, allowing the developers to take the lead and ‘do the legwork’. This can sometimes work advantageously as developers will usually have experience and skills when it comes to obtaining planning permission.
What other factors are there to consider?
Landowners need to remember that entering into an Option Agreement restricts the landowner from selling the property to any other interested party throughout the period of the option, the landowner will need to carefully consider the length of time they are happy for the contract to remain in place.
As an Option Agreement is a legally binding contract, you will have to sell your land, even if other circumstances have changed during the period.
There are many factors to consider when selling land and the process will be largely unfamiliar to most landowners. Seeking advice from an expert in this area, whose role when appointed is to represent your interests, can make a big difference in the outcome that is ultimately achieved.
Lea Hough’s team of land and development consultants are able to offer representation to landowner clients and advise them of the route that best suits their circumstances and that will help them realise the most from a land sale. Please contact us for more information.
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