A guide for those who are considering entering into an agreement with regard to the potential development of the land.
In most cases either experienced land acquirers or professional valuers and land agents negotiate the terms of a land transaction relating to its potential development. They do so with a view to agreeing what are called Heads of Terms (which are not usually legally binding). These terms can be simple or extensive and will include whether an option fee is payable, how the purchase price is established and the length of time the purchaser has to complete or exchange legally binding unconditional agreements. The principal terms are often supplemented depending on the nature of the agreement and I have set out below some examples.
These terms enable the solicitors representing those parties to negotiate the more detailed documents incorporating the Heads of Terms in order to reach the most appropriate legal agreement in order to make the deal legally binding.
The purchasers and sellers or their agents should know the current state of the market and appreciate what commercial terms are achievable for the location and potential use of the land.
Depending upon the nature of the transaction and the desire of the purchaser and seller, I have set out below what type of document might be appropriate for implementing the terms agreed.
