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Conditional option. Conditional call options

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Managing Partner Poorly drafted documents can result in substantial loss, which is why our Property and Planning team are focused on getting the best outcome for you, by advising you about or preparing for you contracts and agreements regarding your property sale, purchase or planning application. Please visit our Payment Options page for more details on costs.

Whilst these all essentially involve the sale of land from a seller to a buyer, there are significant differences. Conditional contract A contract might be conditional on various matters but the most common condition is the buyer obtaining planning permission for a particular use. If the buyer obtains its required planning permission within the time limits set out in the contract, the contract will then become unconditional and both parties will be obliged to complete the sale.

A conditional contract is an agreement or contract conditional upon a specific event, the occurrence of which, at the date of the agreement, conditional option uncertain. A common example is a contract conditional upon the buyer getting planning permission.

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This simple explanation belies the complexity of the drafting involved in the binary options listen of such agreements which often relate to very valuable land or buildings.

Poorly drawn documents can result in substantial loss.

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An option agreement will involve an option period where the party with the benefit of an option can call on the other party to either sell them the property or to buy the property from them at a price and on a given date. If that right is not exercised within the option period then the option lapses and both sides are back to the position they were in before the option was entered into.

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Once granted an option is usually registered at the Land Registry against the relevant title to put any interested party on notice that there is an option in place. A bank which has a mortgage over a property needs to be put on notice of the option otherwise they can sell free of it if it post dates the charge.

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