Although an unconditional contract is the simplest form of the land sale or purchase contract, the management of a construction zone often means that additional conditions are required in the contract to deal with all taxes on copyright, municipal taxes or environmental problems related to the land. If you borrow money, your bank may require that the lease be converted into a final lease file so that all paperwork is in order. ConclusionAs has been the case, there are a number of issues relating to the conditionality of leases (and other agreements) that may cause negotiations to stall. In the recent case of Rentokil Initial 1927 Plc vs. Goodman Derrick LLP (2014), a situation a development was created in which a developer had attempted to free himself from his obligations in a planning agreement. In that case, the agreement involved a formatting error, but the Court reminded the parties that the design of the document was “not a pun” but an attempt to determine what a reasonable person would have considered important to the parties. In this case, the proponent would not have been able to argue (as it had successfully done prior to a previous arbitration) that development conditions, including the requirement for the developer to obtain approvals for waste management, access and landscaping systems, as well as for the drainage of dirt and surface water (among others), are characterized as unacceptable planning conditions. It is advisable to do as much ground work as possible if costs are to be kept low. It is important to ensure that the parties, particularly those with a weaker negotiating position, are properly protected to ensure that what is called a “conditional agreement” on their faces cannot in fact be considered as a mere option in practice by the other party. The conclusion of an option contract allows the buyer to explore the planning potential of the site without having to conclude the purchase if he is unable to obtain the required authorization.
It is also a useful way to structure a transaction in which the land by which the buyer wishes to obtain planning is owned by several different parties. An unconditional contract for the sale or purchase of land is the simplest form of the contract, but this is often unsuitable for a development area, unless it already enjoys a satisfactory building permit and the developer is happy to continue the transaction as it is and does not depend on other authorizations.