Option agreements- an important document
An Option Agreement is a document or agreement which is done between a landowner or property owner and a prospective buyer. It is usually done for an amount of money or deposit which is not refundable and wherein the prospective buyer is legally bound to purchase at a particular date or within a set time. It is a wise way for landowners to get an increase in values which is obtained via development without having to go through the cost of getting planning permissions. There might be other situations too – for example, when the developer intends to buy any adjacent land to their site in the future; or if the land which is under development is having multiple owners, a purchaser may buy the whole site in pieces by obtaining option agreements from each owner.
Types of Option Agreements –
There are usually four types of option agreements.
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