Instead of buying a piece of land for development outright, it
is quite common for developers to take an option to acquire land
from the landowner at some date in the future - conditional on the
developer managing to obtain planning consent for development of
the land, for example.
Such an option gives the developer a contractual right to buy
the land in the future, provided the necessary approvals are
obtained, but does not bind them to do so, if consents are not
forthcoming.
Option arrangements will often be in place for a number of
years, as planning and other conditions can take a long time to
procure.
As such options are only contractual, and there is nothing to
stop a landowner from selling the land to someone else, in breach
of the option arrangement, it is traditional practice for the
developer to be given a standard security over the land, to secure
performance of the landowner's obligations under the option
agreement.
