Land Option Agreements are crucial instruments in Nigerian real estate transactions, particularly for developers and investors seeking to secure potential development sites while conducting due diligence or obtaining necessary approvals. The agreement must strictly comply with the Land Use Act of 1978, which vests all land in the state governors, requiring their consent for valid land transactions. These agreements typically include detailed property descriptions, option periods, purchase prices, and exercise mechanisms, while accounting for state-specific land regulations. They are commonly used in commercial development, agricultural projects, and industrial ventures where parties need time to assess project viability or secure funding before committing to a full purchase.

1. Parties: Identification of the parties: Grantor (landowner) and Grantee (option holder), including full legal names and addresses

2. Background: Recitals explaining the context of the agreement, ownership status of the land, and parties' intentions

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

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

5. Option Fee: Details of the option fee payment, whether refundable, and payment terms

6. Option Period: Duration of the option, including start and end dates, and any extension provisions

7. Exercise of Option: Mechanism for exercising the option, including notice requirements and time frames

8. Purchase Price: Agreed purchase price for the land if option is exercised, including any adjustment mechanisms

9. Title and Governor's Consent: Provisions regarding title verification and obtaining necessary governmental approvals

10. Representations and Warranties: Standard warranties about land ownership, authority to sell, and absence of encumbrances

11. Covenants: Grantor's obligations during the option period regarding land maintenance and restrictions on dealings

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

13. Notices: Process for serving formal notices under the agreement

14. Governing Law: Confirmation of Nigerian law as governing law and jurisdiction

15. Execution: Signature blocks and execution formalities