In a property development context, options are a useful tool for property developers to acquire the right (but not an immediate obligation) to purchase land. Options allow a developer who has identified a potential development site to only proceed with purchasing the site if it is commercially advantageous to do so (for example, once it has carried out its due diligence investigations and secured a favourable development consent to develop the site). An option structure also typically comes with favourable tax and duty implications, in particular, by allowing a developer (as purchaser) to defer the payment of transfer duty on the purchase price of the site.

Practical Law Commercial Real Estate now features a new Options topic, which includes the following resources:

• Toolkit, Options over land. This toolkit is a guide to Practical Law's resources relating to option transactions (in particular, call options) involving land. It includes practice notes and checklists regarding the legal and practical issues to consider as part of option transactions involving land, and the key transaction documents to be entered into and notices to be provided by the parties to an option transaction.
• Practice note, Options over land. This note examines the main characteristics of call options over land and their use by developers and landowners. It considers how call options differ from other types of options (namely put options and put and call options), pre-emptive rights and conditional contracts. It also covers technical legal issues when entering into call options, nomination rights in option transactions, and relevant foreign investment and tax considerations.
• Standard document, Call option deed over land. This is a deed for use where a landowner (as the grantor) grants a call option to the grantee to purchase land that is exercisable during the call option period, in exchange for payment of a non-refundable call option fee. It contains various optional clauses (for example, rights for the grantee to extend the call option period or nominate another party to either exercise the call option or to be the purchaser under the contract that is formed when the grantee exercises the call option).