How do options to purchase work? Commercial Property

An option to purchase (often just called an option) is a contract that gives a potential buyer or tenant the right—but not the obligation—to buy a commercial property at a future date, usually at a price or on terms agreed in advance. It’s effectively a ‘buy later if I want to’ agreement.

The landlord grants an option, usually to their tenant, developer or investor, to purchase the property, within a specified timeframe. The buyer usually pays a fee to secure this right.

To exercise the option, the buyer would usually be required to give written notice within the option period and pay an agreed deposit or balance of purchase price. The seller is legally obligated to sell under the terms of the agreement.