Long Stop Date Option Agreement
The period ending with the long stop date and ending on the repayment date of the last of the twelve (12) tranches is referred to as the „repayment period“. Option contracts are often attractive to developers who wish to obtain a building permit or third-party financing, as they give them the flexibility not to proceed with the purchase if a satisfactory building permit is not issued or if they cannot obtain satisfactory financing. 4. Consider the seller`s concerns; Do you want to limit the development of the land (z.B. in case they stay on site on conserved land) or would they want to dispose of the entire land on their own? Is the agreement reserved for the entire property or will the seller consider a partial sale if the developer`s plans change? Some clients need a certain degree of instruction for such operations and therefore it is useful to determine the desired outcome of the transaction and manage their expectations. It is important to note that, unlike an option agreement, once you have entered into a conditional contract, you will be obliged to conclude the purchase once the conditions precedent have been met. This can only give you a short amount of time to get financing (if needed). Therefore, you could not simply resign from the transaction if your circumstances change. In addition to the benefits for developers, there are also benefits for landowners, making option contracts an attractive choice. A landowner can request an option amount to be paid on the day the option agreement is exchanged.
The amount of the option is usually withheld by the landowner when the developer does not exercise the option and, in addition, when a developer applications for a building permit and decides not to proceed, the landowner can use the building permit free of charge for him. It can also have a positive impact on the value of the land. If the conditions precedent provided for in the subscription contract are not fulfilled (or are not cancelled if applicable) by the date of four (4) weeks from the date of the subscription contract (or a later date on which the parties can agree) (the „long stop“ date), the subscription contract terminates and has no additional effect and neither party is liable to the other party in respect of concerns the subscription contract. Given the current situation, we recommend that the parties agree to extend the above-mentioned time limit in order to reduce the likelihood that the measures necessary to close the transaction will not be implemented or received in a timely manner. If either party no longer wishes to be completed, this is another matter that will be dealt with in a later article. The option period is the period during which you have the opportunity to trigger the option and continue the purchase of the country. They must send the landowner a „notification of option“, on which an acommony must normally be made and a binding contract is concluded. In the event that you do not submit an option notification within the option period, the option agreement will be null and void and the landowner may sell the property to third parties at will. . . .