(Option #2) - Option Agreement The OPTION AGREEMENT is made on the ______________________day of ___________________20____, between ______________________________________________________________hereinafter referred to as OPTIONEE, and ______________________________________________________________hereinafter referred to as OPTIONOR. OPTIONOR grants OPTIONEE an option to purchase the real property situated in the City of ___________________________________, State of __________________________________ described as:
Street Address: ______________________________________________________________henceforth referred to as the premises.
In consideration of the payment by Optionee of ____________________________________________ and other good and valuable consideration, it is agreed as follows:
1) Optionor grants to Optionee, its successors and assigns, the right to purchase the premises at any time after __________________ 20_____, and prior to ______________ 20_____, upon at least ( ) days prior written notice to Optionor at the last address provided by Optionor to Optionee in writing. Notice, if mailed, shall be certified mail and shall be deemed to have been given upon the day following postmark of certified mail receipt. If option is not exercised Optionor shall retain any consideration as full liquidated damages and all obligations of each party shall terminate.
2) In the event the option is exercised:
A) The closing of title shall be held at ______________________________ at ______________________
___________________________________________.
B) The purchase price for the premises shall be ________________________________________________
___________________________________________($_________________________) to be paid on the closing date as set forth in the following manner: First, the Option consideration shall apply to purchase price, after which the balance shall be paid in the following manner:
_______% of the total rental payments shall be credited toward the purchase price. Optionee reserves the right to prepay all or any part of the principle sum remaining due and such payment shall be applied first to interest, then to principal balance; said payment can be made without penalty at any time.
C) Upon receipt of the consideration noted above, whether it be earnest money, lease deposit, or goods and services accepted by the Optionor, all parties agree to execute and to place into escrow with a disinterested third party acceptable to both Optionor and Optionee, a fully executed contract to purchase together with all instruments required by law to convey all interest in said property to the Optionee or his assigns or nominees provided that all terms and conditions of this agreement have been met as heretofore agreed in this agreement. Upon delivery of a certified check in the amount of _______________________________ (minus accumulated rent credit as stated in paragraph B) to the escrow agent above, he/she shall be directed by the Optionee to convey title by delivery of a grant deed as evidence of free and clear title subject only to those encumbrances, covenants, and restrictions listed herein.
Page 1 of _______pages.
D) The Optionee has the right to sell, assign, pledge as collateral and transfer all his interest in this Option Agreement and to sub-lease the premises in the event Optionee is leasing. The Option contained herein is not contingent upon the tenant’s satisfactory performance of the lease, being a separate agreement which shall extend to the end of the original lease period plus any renewals or extensions there of, but in no instance beyond __________
years.
E) In the event of any default in payment of any mortgage on the above described property: or in failure to pay taxes when due: or to keep the property fully insured against loss by fire, windstorm, flood or natural disaster in an amount of no less than fair market value until the time of transfer: or in the event of any impairment to the title, by liens or encumbrances, or by any physical deterioration, normal wear and tear excluded, which reduces the value of the Optionee’s interest: title to the premises shall pass immediately to the Optionee or his assigns, without further compensation to the Optionor. Any insurance proceeds in case of loss, at discretion of Optionor, shall be allowed to Optionee who shall take the property in accordance with this contract not withstanding any injury or destruction of said buildings, or the Optionor shall return the improvements to their configuration, condition and functional utility as they now exist.
F) In the event of foreclosure or bankruptcy, the Optionor’s right of redemption on the premises shall transfer to the Optionee without further compensation and this Option shall serve as a conveyance without further actions by the Optionor.
G) This Option is binding on the heirs, assigns, trustees and successors, of the Optionor in the event of its death or incompetence. Conveyance of any rights, leases, or lien holder interest conveyed after the date of this Option shall be extinguished when it is exercised.
H) Optionee, or his designee, shall have access to the above premises for the purpose of inspection/appraisal, or of showing the premises to prospective purchasers or tenants, and shall further have the right to place a sign upon the premises during said time period offering the property for sale or lease.
I) This Option Agreement is contingent upon Optionee obtaining a suitable suboptionee/subleasee.
J) Optionor agrees to provide Optionee with a Property Profile of the premises, and a copy of the Note and Deed securing the financing of said premises.
OPTIONOR__________________________________ OPTIONEE_________________________________
OPTIONOR__________________________________ OPTIONEE_________________________________
DATE_____________ DATE____________
Page______ of ______Pages This document and accompanying materials are designed to provide authoritative information in regard to the subject matter covered in it. It is for illustration purposes only and presented with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional opinions. If legal advice or other expert assistance is required, the services of a competent professional should be sought. |
