NEED TO KNOW OPTIONS & CONDITIONAL CONTRACTS

When you’re buying a plot, it’s important to know it can support a home that suits your requirements at a price you can afford. Often the main area of uncertainty is whether planning permission will be granted (or an existing consent amended) for a scheme you’re happy with. There could also be issues with legal questions or practical impediments that could increase build costs or even render your project unviable. To mitigate these issues, you might want to put in place an option or conditional contract so that you’re only bound to proceed with the plot purchase if the issues can be resolved to your satisfaction. Here’s the basics:

Option contracts These give you an exclusive right to buy a property for a pre-defined period of time, and set out what needs to be done (such as obtaining planning consent). You’ll pay a fee (often relatively small) to secure the option, and you aren’t bound to proceed if you decide you don’t want to. This route tends to work well when land isn’t already on the market and there’s no current permission in place. The option buys you time to sort that out without fear of someone else putting in a higher offer.

Conditional contracts This is basically a contract to buy that has one or more conditions written into it, requiring something to happen before the contract completes. The price you’ll pay is pre-agreed, but you get time to sort out the issues. This might include getting planning consent where none exists, or getting detailed permission if only outline exists. Maybe there are legal considerations to resolve, such as securing a right of way, or practical factors such as dealing with poor drainage on site.

If you’re considering using an option or conditional contract to assist with a plot purchase, always involve an experienced solicitor to draft the agreement. For more advice log on to www.self-build.co.uk/option-contracts