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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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i own a farm and recently have been contacted by a big house

Resolved Question:

i own a farm and recently have been contacted by a big house builder to buy the option to develop 120 acres of farm land. my question is before i meet with them what does this mean and how much per acre could i expect to get for selling them the option to buy and how much is development land worth per acre
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask have prices been discussed at all to date as to the amount they are willing to pay please?

Customer:

No prices have been discussed as yet

Joshua :

Thank you. Is the developer proposing to make an application for planning permission presumably?

Joshua :

... If you agree to given them an option?

Customer:

yes in the next few years

Joshua :

Thanks.

Joshua :

An option agreement is an agreement between a landowner and a prospective buyer to give the buyer an option to buy the land at an agreed price for a period of time again which is agreed between the parties.

Joshua :

Such agreements are common where a developer wishes to explore the possibility of acquiring planning permission but obviously does not to spend time and money doing so unless he knows he can buy the land if he gets it but equally if he doesn't get it he may not want to have to buy the land.

Joshua :

An option agreement can be given without or without a premium - i.e. a payment to you just for granting the option. you will need to consider that you will be unable to sell to anyone else during the option period.

Joshua :

In terms of the price it is crucial that you retain the survices of a professional land valuer to help you negotiate the price as values vary from area to area. However to give you some broadline guidance, the average price of agricultural land in the UK as of the first quarter was £8700 per acre. The value of residential development land will typically be worth between 50 and 100 times that sum depending on the area so it is potentially significant sums of money if there is a possibility of getting planning permission.

Joshua :

Is there anything above I can clarify for you?

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