Option To Purchase Contract for Nigeria

Option To Purchase Contract Template for Nigeria

An Option to Purchase Contract under Nigerian law is a legally binding agreement that gives the potential purchaser (Option Holder) the exclusive right, but not the obligation, to buy a specified property at a predetermined price within a set timeframe. The document must comply with Nigerian property laws, particularly the Land Use Act 1978, and requires proper registration and stamping to be legally enforceable. It includes detailed provisions about the property, purchase price, option period, exercise procedures, and completion requirements, while addressing specific Nigerian legal requirements for property transactions.

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What is a Option To Purchase Contract?

The Option To Purchase Contract is a crucial document in Nigerian property transactions, providing a structured framework for securing future property acquisition rights. This agreement is commonly used when parties need time to arrange financing, conduct due diligence, or obtain necessary approvals before completing a property purchase. It must comply with Nigerian property laws, including the Land Use Act 1978 and relevant state-specific regulations. The document typically includes essential details such as property description, purchase price, option period, exercise mechanisms, and completion procedures. It's particularly valuable in commercial real estate transactions, development projects, and situations where phased property acquisition is desired. The Option to Purchase Contract protects both the property owner's and potential buyer's interests while providing clarity on the terms and conditions of the potential sale.

What sections should be included in a Option To Purchase Contract?

1. Parties: Identification and details of the Option Grantor (property owner) and Option Holder (potential purchaser)

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement including Property, Option Period, Purchase Price, and Exercise Notice

4. Grant of Option: Clear statement granting the exclusive right to purchase the property within the specified period

5. Option Period: Duration for which the option is valid and any conditions for extension

6. Option Fee: Amount payable for the option and whether it's applicable to the purchase price

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

8. Purchase Price: Agreed purchase price for the property and payment terms

9. Property Details: Legal description and details of the property subject to the option

10. Title and Ownership: Confirmation of title and any encumbrances on the property

11. Completion: Process and timeline for completing the sale after option exercise

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

13. Governing Law: Specification of Nigerian law as governing law and jurisdiction

14. Execution: Signature blocks and execution requirements

What sections are optional to include in a Option To Purchase Contract?

1. Due Diligence: Terms allowing the Option Holder to conduct property investigations, used when due diligence hasn't been completed before option agreement

2. Property Access: Terms governing access to the property during the option period, needed when inspection or evaluation is required

3. Assignment: Rights and restrictions regarding assignment of the option, included when transfer rights are negotiated

4. Development Rights: Terms regarding property development during the option period, relevant for undeveloped land or properties requiring renovation

5. Multiple Properties: Special terms for options covering multiple properties, used when deal involves property portfolio

6. Environmental Conditions: Special provisions regarding environmental assessments and liabilities, important for industrial or potentially contaminated properties

7. Planning Permissions: Conditions relating to obtaining necessary planning permissions, relevant for development properties

What schedules should be included in a Option To Purchase Contract?

1. Property Description Schedule: Detailed legal description of the property, including boundaries, measurements, and registered title information

2. Option Exercise Notice Template: Standard form for exercising the option

3. Payment Schedule: Breakdown of payment terms, including option fee, deposit, and balance

4. Encumbrances Schedule: List of existing encumbrances, charges, or restrictions on the property

5. Due Diligence Requirements: Checklist of required documentation and investigations

6. Permitted Use Schedule: Details of allowed property uses and any restrictions

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

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

Jurisdiction

Nigeria

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Commercial Property

Residential Property

Industrial Property

Agriculture

Retail

Hospitality

Manufacturing

Urban Development

Construction

Mining

Oil and Gas

Relevant Teams

Legal

Real Estate

Property Management

Commercial

Business Development

Finance

Facilities

Operations

Compliance

Risk Management

Project Management

Investment

Relevant Roles

Real Estate Manager

Property Developer

Legal Counsel

Commercial Director

Property Manager

Investment Manager

Real Estate Agent

Business Development Manager

Land Administrator

Facilities Manager

Contract Manager

Chief Financial Officer

Project Manager

Asset Manager

Acquisition Manager

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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