Option Agreement For Purchase Of Real Property

Option Agreement For Purchase Of Real Property Template for Philippines

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Key Requirements PROMPT example:

"I need an Option Agreement for Purchase of Real Property for a commercial lot in Makati City, Philippines, where the option holder is a Singapore-based development company, so it needs to include foreign ownership compliance clauses and specific provisions for future commercial development rights."

Document background

The Option Agreement For Purchase Of Real Property is a crucial document in Philippine real estate transactions, providing a potential buyer with exclusive rights to purchase a property while allowing time for due diligence, financing arrangements, or other considerations. This agreement type is commonly used in commercial real estate transactions, property development projects, and strategic land acquisitions in the Philippines. It must comply with local property laws, including the Civil Code of the Philippines, Property Registration Decree, and relevant tax regulations. The agreement is particularly valuable when buyers need time to arrange financing or conduct thorough due diligence, while sellers want assurance of a serious buyer through an option fee. Special considerations must be included for foreign buyers due to constitutional restrictions on foreign land ownership in the Philippines.

Suggested Sections

1. Parties: Identification of the Option Grantor (property owner) and Option Holder (potential buyer), including complete legal names and addresses

2. Background: Context of the agreement, including brief property description and parties' intention to enter into an option arrangement

3. Definitions: Defined terms used throughout the agreement, including 'Option Period', 'Option Fee', 'Purchase Price', and 'Property'

4. Grant of Option: Clear statement of the exclusive option being granted to purchase the property, including the option period duration

5. Option Fee: Details of the option fee amount, payment terms, and whether it will be applied to the purchase price

6. Exercise of Option: Process and requirements for exercising the option, including notice requirements and time constraints

7. Purchase Price: Specified purchase price for the property if the option is exercised

8. Property Description: Detailed legal description of the property subject to the option

9. Title and Documentation: Requirements regarding proof of clean title and necessary documentation

10. Representations and Warranties: Standard warranties about property ownership, authority to sell, and condition of the property

11. Termination: Circumstances under which the agreement may be terminated and consequences

12. Governing Law: Specification of Philippine law as governing law and jurisdiction

13. Execution: Signature blocks and notarization requirements

Optional Sections

1. Due Diligence: Terms for conducting property inspections and investigations, used when the option holder requires a due diligence period

2. Financing Contingency: Conditions related to the option holder's ability to secure financing, included when the buyer requires financing

3. Foreign Ownership Compliance: Special provisions ensuring compliance with Philippine foreign ownership restrictions, required when the option holder is foreign

4. Broker Provisions: Terms regarding real estate broker involvement and commissions, included when brokers are involved

5. Environmental Matters: Specific provisions regarding environmental conditions or requirements, necessary for properties with potential environmental concerns

6. Tenant Rights: Provisions addressing existing tenant rights or leases, included when the property is currently leased

7. Development Conditions: Specific conditions related to property development potential, included when the property is intended for development

Suggested Schedules

1. Property Details Schedule: Detailed technical description of the property, including lot number, boundaries, and technical specifications

2. Title Documents: Copies of relevant title documents and certificates

3. Payment Schedule: Detailed breakdown of payment terms, including option fee and purchase price payment structure

4. Permitted Encumbrances: List of accepted encumbrances or limitations on the property title

5. Form of Exercise Notice: Template for the formal notice to exercise the option

6. Due Diligence Documents: List of documents to be provided for due diligence

7. Property Plans and Surveys: Technical drawings, surveys, and plans of the property

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Real Estate

Construction

Property Development

Banking and Finance

Legal Services

Agriculture (for agricultural land)

Commercial Property

Residential Property

Industrial Property

Hospitality

Retail

Relevant Teams

Legal

Real Estate

Property Management

Business Development

Corporate Development

Acquisitions

Investment

Compliance

Finance

Operations

Relevant Roles

Real Estate Manager

Property Developer

Legal Counsel

Real Estate Broker

Corporate Lawyer

Property Manager

Acquisition Manager

Development Director

Chief Legal Officer

Real Estate Investment Manager

Land Acquisition Specialist

Commercial Property Manager

Real Estate Attorney

Business Development Manager

Property Investment Analyst

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