Option, Overage & Pre-emption Agreements

In a nutshell:

Option Agreement – a prospective buyer enters into an agreement with the landowner for the right to buy their land paying a small fee to the landowner and promises to purchase within a timeframe such as upon receipt of successful planning permission.

Overage Agreement – (also known as a clawback or uplift agreement) often used by the Seller to secure a sum of money which will be payable on top of the sale price by the buyer or subsequent purchasers of the land if certain special conditions are met. For instance, often you will see conditions in the overage agreement which requires the buyer (and subsequent buyers) to pay the seller an additional fee if the buyer obtains planning permission to build two or more dwellings on the land. However, if the buyer obtains planning permission for one dwelling then there is no payment due.

Pre-emption Agreement – (Right of First Refusal) the prospective buyer only has a right to be fist in line to purchase the land, if the owner decides to sell the land within the pre-emption period.

S106 Agreement – Planning obligations. A planning obligation is a legal charge on land, binding it and whoever owns it, which aims to mitigate the impact of development in the area. A developer could be asked by the local authority to provide financial contributions or specific actions (such as provide affordable housing, improving infrastructure or funding local facilities). We have plentiful experience negotiating with the local authority and lenders to assist your project along the way.