We have recently concluded several major option agreements on behalf of vendors across Hampshire.
One deal that we have been working on for an incredible 30 years has just finalised with planning permission being granted on a 12½ acre site in Warsash. The development site was previously used for strawberry growing but in recent years it has been vacant. A major regional developer will buy land with the planning granted for 140 houses. Daniells Harrison will also be involved in providing a valuation on the development land and it is anticipated that the development works will start in the short term.
Chris Daniells, who has been working with the vendor and their family for the past 30 years to make this deal happen says,
“Securing the option agreement on this land is a tremendous result both for our client and the developer. It’s been a long time in planning and we are all looking forward to seeing the works commence.”
We are also involved with options on 3 separate parcels of land east of Brook Lane in Warsash. Planning has just been granted and we are acting on behalf of the 3 land owners.
Finally, we have recently successfully concluded an option agreement on a half-acre site, acting on behalf of the vendors. The potential development land is in a village on the outskirts of Southampton.
What is an option agreement?
An option agreement is a legally binding contract entered into by a landowner and a potential buyer. Often, but not always, the buyer is a developer and the option agreement will be used where the land has development potential but no planning in place yet.
The vendor will be seeking to sell the land as a potential development however the buyer must face all the costs of getting the planning permission. The buyer is granted an option to purchase the land at some point in the future, during a defined “option period”. Sometimes the buyer must satisfy conditions first, and in the case of development land this is making a successful application for planning permission.
Once the conditions have been satisfied the buyer can require the seller to transfer the land. The price to be paid by the buyer will be set out in the Option Agreement – either a fixed price or a price based on the market value of the land with the benefit of planning permission.
Option agreements are beneficial for both parties. They enable landowners to achieve the increase in land values due to the development potential without risking the cost of obtaining planning permission and provide security for the potential developer as they have first rights to purchase the land if permission is granted.
Daniells Harrison can act for either landowners or developers in respect of all types of option agreements. We can broker the detail and also agree the market value of the land once the planning permission has been granted.