Land Option Agreement for United Arab Emirates

Land Option Agreement Template for United Arab Emirates

A Land Option Agreement under UAE law is a legally binding contract that grants the option holder the exclusive right, but not the obligation, to purchase specified land from the property owner within a predetermined timeframe and at an agreed price. The agreement must comply with UAE federal laws and specific emirate-level regulations, including requirements from the relevant Land Department and RERA. It includes detailed provisions for option exercise mechanisms, payment terms, due diligence requirements, and property transfer procedures, all structured within the framework of UAE property laws and Sharia principles.

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What is a Land Option Agreement?

The Land Option Agreement is a crucial document in UAE real estate transactions, particularly used in development projects and strategic land acquisitions. It provides the option holder with a secure right to purchase property while allowing time for due diligence, financing arrangements, and necessary approvals. The agreement must navigate UAE's complex property laws, including federal and emirate-specific regulations, foreign ownership restrictions, and registration requirements. Used predominantly in scenarios where immediate purchase isn't feasible or desired, it offers flexibility while protecting both parties' interests. The document typically includes comprehensive details about the property, pricing mechanisms, timeframes, and conditions for exercise, all structured to ensure compliance with UAE legal requirements and market practices.

What sections should be included in a Land Option Agreement?

1. Parties: Identification of the option grantor (landowner) and grantee, including full legal names and details as required by UAE law

2. Background: Context of the agreement, including property overview and parties' intentions

3. Definitions: Key terms used throughout the agreement, including specific UAE legal and property terminology

4. Grant of Option: Core terms of the option grant, including exclusivity provisions

5. Option Period: Duration of the option, including start and end dates

6. Option Fee: Amount, payment terms, and status of option fee (refundable/non-refundable)

7. Exercise of Option: Procedure and requirements for exercising the option, including notice requirements

8. Purchase Price: Agreed purchase price for the land and payment structure

9. Title and Registration: Provisions regarding title verification and registration requirements under UAE law

10. Representations and Warranties: Standard and UAE-specific warranties regarding property ownership and compliance

11. Termination: Circumstances and procedures for agreement termination

12. Confidentiality: Obligations regarding confidential information

13. Governing Law and Jurisdiction: UAE law provisions and jurisdiction specifications

14. Notices: Communication procedures between parties

15. General Provisions: Standard boilerplate clauses adapted for UAE law

What sections are optional to include in a Land Option Agreement?

1. Development Conditions: Used when the option is contingent on specific development approvals or conditions

2. Due Diligence: Include when specific due diligence rights and procedures are required

3. Multiple Option Parcels: Used when the option covers multiple land parcels with different exercise rights

4. Environmental Matters: Include when environmental investigations or warranties are relevant

5. Existing Tenancies: Required when the property has existing tenants or occupancy agreements

6. Financing Provisions: Include when specific financing arrangements are part of the option structure

7. Construction Rights: Used when pre-purchase construction or investigation rights are granted

8. Islamic Finance Compliance: Include when the transaction needs specific Sharia compliance provisions

What schedules should be included in a Land Option Agreement?

1. Property Description: Detailed legal description of the land, including title details and UAE registration particulars

2. Plan: Survey plan or map of the property as required by UAE land regulations

3. Option Exercise Notice: Form of notice for exercising the option

4. Due Diligence Requirements: List of required documents and investigations

5. Purchase Price Calculation: Detailed breakdown of purchase price components and adjustments

6. Permitted Encumbrances: List of accepted encumbrances on the property

7. Required Approvals: List of necessary governmental and regulatory approvals

8. Form of Sale and Purchase Agreement: Draft of the final sale agreement to be executed upon option exercise

Authors

Alex Denne

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

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Property Development

Construction

Infrastructure

Commercial Property

Residential Property

Investment

Urban Planning

Hospitality

Retail

Industrial Development

Mixed-use Development

Relevant Teams

Legal

Real Estate

Property Development

Investment

Finance

Compliance

Risk Management

Project Management

Strategic Planning

Operations

Corporate Development

Relevant Roles

Real Estate Director

Property Development Manager

Legal Counsel

Investment Manager

Land Acquisition Manager

Chief Executive Officer

Chief Financial Officer

Development Director

Project Manager

Real Estate Analyst

Property Portfolio Manager

Compliance Officer

Risk Manager

Real Estate Transaction Manager

Strategic Planning Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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