FREQUENTLY ASKED QUESTIONS

WHAT IS AN OPTION AGREEMENT?

An Option Agreement is a binding contract between a landowner and a land buyer where the buyer has the option to purchase land within a certain time frame, subject to planning.

WHAT WILL YOU BE ABLE TO OFFER ME? 

Following a site visit with you, we will work with our team of specialist planners and architects to draft a proposed scheme. Once this has been completed, we will be back in touch to discuss the offer (4 - 6 weeks). We may ask for an indication of your expectation beforehand.

WILL THE OFFER PRICE BE AGREED BEFORE THE OPTION AGREEMENT IS SIGNED?

Yes.

WILL THE INITIAL OFFER-PRICE CHANGE?

No, this will be written into the Option Agreement and will be the amount you receive at the final point of sale. 

CAN YOU OFFER A CASH/OUTRIGHT PURCHASE?

Typically, we do not offer cash-purchase options as there is always an element of risk with any site. Whilst we only offer on sites we are very confident in, the Option Agreement is our preferred method of purchase.

HOW LONG WILL THE OPTION AGREEMENT LAST?

Typically, we will enter into a 12-month Option Agreement with you, with a 6-month extension-option should we need to re-submit a planning application or deal with unforeseen circumstances.

COULD THE DEAL BE DONE IN LESS THAN 12 MONTHS? 

Yes. We aim for 12 months as a worst-case scenario but typically look to achieve planning before this. We will keep you informed on key stages of progress throughout the process but have the right to exercise the Option Agreement as soon as planning has been approved. 

 DO I NEED A SOLICITOR?

Yes, you will need to instruct a Commercial Solicitor who understands Option Agreements. We can offer recommendations. 

WILL I BE ABLE TO STIPULATE MY CONDITIONS BEFORE I SIGN THE OPTION AGREEMENT?

Yes.

CAN I SEE THE FINAL DRAFT OF THE OPTION AGREEMENT BEFORE I SIGN IT?

Yes, as many times as you require.

HOW LONG WILL IT TAKE TO SIGN INTO THE OPTION AGREEMENT?

This depends on the complexity of the scheme. It could be as little as 4 months or up to 12 months +.

HOW MUCH WILL I HAVE TO PAY?

You won’t have to pay anything. We will cover your legal costs up to £1,500 (plus VAT) and all planning costs.

WILL THERE BE MUCH PAPERWORK?

You will need to satisfy yourself that you have read and understood the Option Agreement and the Transfer Deed. Your solicitor will help with this. You will also be asked to fill in a Standard TA6 Property Information Form and an Additional Development Enquiries form. 

WILL YOU NEED ACCESS TO MY PROPERTY AFTER THE OPTION AGREEMENT IS SIGNED?

Yes, we will need to liaise with you for relevant searches and investigations to be carried out. These will include (but may not be limited to) a Topographical Survey, an Ecology Survey and a Site Investigation. We will give over 48 hours’ notice for any site visit required. 

DO I NEED PERMISSION FROM MY MORTGAGE LENDER?

Yes, if you have a mortgage and you are entering into an agreement to sell part of your title, you will need to contact your lender to get permission. If you are selling your full title, we still advise speaking to your lender for clarification.

WHEN WILL YOU SUBMIT THE PLANNING APPLICATION?

We will aim to submit the planning application within 4 months of the Option Agreement being signed and exchanged.

HOW LONG WILL IT TAKE THE COUNCIL TO DECIDE WHETHER OR NOT TO GRANT PLANNING?

A council will usually make their decision within 12 to 16 weeks, but this can differ from region to region.

WHEN WILL YOU SELL IT TO A DEVELOPER?

We will start marketing your land to our network of developers during the planning application process. We will aim to have a buyer in place as soon as planning is granted.

IF I AM SELLING PART OF MY LAND, WHEN WILL THE TITLES BE SPLIT?

The titles will be split at the point of final sale.

WILL THIS DECREASE THE VALUE OF MY HOUSE?

The value of your house won’t be affected, as houses are valued on a price per square foot/metre of the property itself. There may be a small reduction in what your overall estate may be worth to a buyer. However, our offer-price for your land will far outweigh any potential loss. 

IF I HAVE TO MOVE HOUSE, WILL THERE BE TIME TO DO SO?

Yes, we can arrange for there to be a delay between final exchange and completion of sale.

WHAT HAPPENS IF YOU GET PLANNING PERMISSION BUT CAN’T SELL IT ON?

We will have no choice but to withdraw from the Option Agreement, but you will then own land with planning permission on it and be free to do with it as you please.

WILL I NEED TO PAY CAPITAL GAINS TAX?

This will depend on your personal circumstances, and we always advise that our customers speak to a Capital Gains Tax specialist if unsure. But here is what HMRC are saying:

You’ll be entitled to full relief where all the following conditions are met:

• the dwelling house has been your only or main residence throughout your period of ownership
• you have not been absent, other than for an allowed period of absence or because you have been living in job-related accommodation, during your period of ownership
• the garden or grounds including the buildings on them are not greater than the permitted area. (The area of garden and grounds of a person’s residence that qualifies for relief is referred to in the legislation as the permitted area. The permitted area includes the site of the dwelling-house. S222(2) TCGA92 defines the permitted area as 0.5 hectares. If the garden and grounds of the residence, including the site of the dwelling-house, do not exceed the permitted area then relief is automatically due for that whole area.)
• no part of your home has been used exclusively for business purposes during your period of ownership. Working from home using a room that is also used for non-business purposes will not prevent entitlement to full relief

If you meet all of these conditions, you will not have to pay CGT on the disposal. 

WHAT EXPERIENCE DO YOU HAVE?

We work with a team of experts in their field, and our immediate business partner has over 10 years’ experience in planning uplift and land development. We will be more than happy to share some example schemes that have been completed in the past.