Page 137 - Demo

More common in recent years has been to approach such disposals on the basis of one of the following:
1. An option
This is the right for a buyer to buy land at a de ned price during a de ned period.
The buyer has to pay a premium for the option as, in effect, the seller is saying they will not sell to anyone else during the de ned option period.
This is usually a very bene cial position for the buyer who then goes off to seek planning (sometimes they are not even obliged to try for that) and the buyer only has to proceed with the purchase if a) planning is successful and b) they still want to proceed at that de ned price.
If a) happens, the buyer is likely to have a go at getting the land cheaper anyway by agreement: their risk is that if they let the option expire they lose their right to buy the land in.
Options do not often work well for charity sellers as they are so buyer friendly and once the charity is selling it usually does not wish to hand over effective control to the buyer. Great care (and advice) is needed over them.
2. A conditional sale agreement
This is where if the buyer gets planning of a certain type they must complete on the purchase at an agreed price.
The buyer is obliged to get on with seeking planning and there is a known timetable. If the long stop date is reached without completion, either party can end the obligations. Long stop dates are usually shorter than option periods.
There is no up-front premium: only a smaller (usually 5%) returnable deposit.
The buyer having spent lots on planning will usually have commercial incentive to complete. They may try to get the seller to agree to a lower price but a looming long stop date usually keeps a control on that.
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