An option agreement is one of the most effective legal tools for securing development land or maximising future land value—but only when drafted correctly.
At Saracens Solicitors, our specialist option agreement solicitors advise landowners, property developers, promoters, investors and overseas clients on strategic, enforceable option agreements across London and the UK.
Whether you are looking to secure land subject to planning, protect land value, or structure complex development deals, early legal advice is critical.
What Is an Option Agreement?
An option agreement is a legally binding contract between a landowner and a buyer (usually a developer) that grants the buyer the exclusive right—but not the obligation—to purchase land or property:
- At an agreed price or
- Via a valuation mechanism
- Within a fixed time period or after a trigger event, such as the grant of planning permission
In return, the buyer typically pays an option fee, which is usually non‑refundable.
Why Option Agreements Are Used in Property Development
Option agreements allow developers and investors to control land without immediate purchase, reducing financial and planning risk, while giving landowners certainty and potential upside.
Common situations include:
- Securing land while applying for planning permission
- Strategic land acquisition for long‑term development
- Purchasing adjacent or neighbouring land
- Assembling large sites from multiple owners
- Structuring overage or uplift arrangements
Types of Option Agreements Explained
Call Option
The buyer has the right to compel the landowner to sell the property.
Put Option
The landowner can require the buyer to proceed with the purchase.
Cross Option
Both parties have reciprocal rights—often used in joint ventures or complex developments.
Conditional & Reverse Options
Used where planning, overage, or performance‑based triggers apply. Poor drafting here is one of the most common causes of disputes.
How Long Can an Option Agreement Last?
Under the Perpetuities and Accumulations Act 2009, option agreements entered into after 6 April 2010 can last for any agreed duration—but it must be expressly stated.
Failure to negotiate a clear term can seriously disadvantage landowners and create enforceability risks for developers.
Key Clauses That Must Be Professionally Drafted
An effective option agreement must clearly address:
- Option fee and payment mechanics
- Purchase price or valuation formula
- Option period and trigger events
- Planning responsibilities and costs
- Restrictions on the landowner
- Overages and uplift provisions
- Assignment rights
- Termination and break clauses
- Service of option notices
⚠️ Errors in any of the above can result in significant financial loss.
Advantages of Option Agreements
For Developers
- Secure land with reduced capital risk
- Time to obtain planning permission
- Greater deal flexibility
- Competitive advantage in high‑demand locations
For Landowners
- Immediate option fee
- Potential for increased land value
- Certainty of buyer
- Opportunity for overage or uplift
Risks of Not Using Specialist Solicitors
Without specialist option agreement solicitors:
- Agreements may be unenforceable
- Land may be locked up indefinitely
- Planning obligations may be unclear
- Overages may fail to trigger
- Exit strategies may collapse
Option agreements must be tailored, not templated.
How Saracens Solicitors Can Help
Our option agreement solicitors provide:
✅ Strategic advice aligned to your commercial objectives
✅ Bespoke drafting and negotiation
✅ Developer & landowner representation
✅ Planning‑led transaction support
✅ UK and international client expertise
We focus on commercial certainty, legal robustness and risk control.
Frequently Asked Questions / Questions & Answers
Are option agreements legally binding?
Yes. Once signed, an option agreement is legally binding and enforceable if correctly drafted.
Who pays for planning permission under an option agreement?
This is negotiable but is usually the responsibility of the developer.
Is an option fee refundable?
Usually not, even if the option is not exercised.
Can an option agreement be terminated early?
Only if clear termination clauses are included in the agreement.
Do option agreements affect land value?
They can significantly increase or restrict value depending on structure and duration.
