Q&As

What are the implications if an original party (the buyer) to an option agreement conditional upon planning obtains the planning permission, and in the time between obtaining the planning and exercising the option, assigns the benefit of the option to another buyer for an option fee that is equivalent to the uplift on the land due to it having the benefit of the planning?

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Produced in partnership with Helen Galley of XXIV Old Buildings
Published on LexisPSL on 19/03/2019

The following Property Q&A produced in partnership with Helen Galley of XXIV Old Buildings provides comprehensive and up to date legal information covering:

  • What are the implications if an original party (the buyer) to an option agreement conditional upon planning obtains the planning permission, and in the time between obtaining the planning and exercising the option, assigns the benefit of the option to another buyer for an option fee that is equivalent to the uplift on the land due to it having the benefit of the planning?

What are the implications if an original party (the buyer) to an option agreement conditional upon planning obtains the planning permission, and in the time between obtaining the planning and exercising the option, assigns the benefit of the option to another buyer for an option fee that is equivalent to the uplift on the land due to it having the benefit of the planning?

In this query, a person, usually a developer, wishes to buy land for development but is concerned that planning permission may not be forthcoming. The developer does not want to be bound to acquire land which may well prove to be worthless for development purposes and so the developer might:

  1. enter into a conventional contract at a price to reflect its current value without planning permission subject to an uplift or overage payment in the event that planning permission is granted within a fixed period, or

  2. enter into a contract conditional upon planning permission being obtained within a fixed or reasonable time, or, as in this case

  3. enter into an option to purchase the property at a fixed price or price to be determined in accordance with an agreed formula which option can be exercised during a period commencing on the grant of planning permission and

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