There is a significant amount of overlap between conditional contracts, options and rights of pre-emption, but the difference between them is largely one of control.
1. The conditional contract will be effective if the specified conditions are satisfied. Such satisfaction may, to an extent, be outside the control of one or even both the parties to the contract for example, if the condition relates to planning permission or the grant of consent by a third party.
2. An option is entirely under the control of the grantee to the option. If he chooses not to exercise the option, the other party cannot compel the sale and purchase to take place.
3. A right of pre-emption is normally capable of being exercised only where the grantor of the right wishes to sell the land which is subject to the pre-emption right. If there is no proposal to dispose, the holder of the right cannot force a sale to himself.
It is important to consider what your objectives are and which type of document best meets your needs.
At Else Solicitors we have an experienced team of property team to help advise you as to which legal solution is most suitable to meet your commercial needs. There are many potential pitfalls involved in options, pre-emptions and conditional contracts and it is therefore important to understand the consequences of entering into any such documentation.
For more detailed legal advice in relation to this article, please contact the commercial property team on 01283 526200, alternatively you can send us a message and we will get in touch at a time that suits you.