Options over land

by Practical Law Property

This practice note discusses the main characteristics of call options over land, outlining their advantages for both developers and landowners. This practice note examines how call options differ from other agreements such as put options, pre-emption agreements, and conditional contracts, clarifying their distinct features and applications. It addresses the application of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (LPMPA 1989) to call options, option notices and any variations to option agreements. Furthermore, this practice note explores the relevance of the rule against perpetuities to call options and considers how to ensure a landowner's positive obligations in a call option bind their successors in title. The importance of registering the benefit of a call option, for both unregistered and registered land, is highlighted, alongside the requirements for legal assignment of the benefit of an option. This practice note also touches upon the implications of Stamp Duty Land Tax (SDLT) in England, Land Transaction Tax (LTT) in Wales and Value Added Tax (VAT) for call option agreements.