If you're in the process of negotiating the purchase of a property for development where planning permission will be required, you may require a conditional contract.

What is a conditional contract?

A conditional contract is a contract agreement that only requires performance once the outlined conditions are met. This legal agreement requires prior performance of a condition or conditions to be satisfied before completion takes place. Common conditions are:

1. obtaining planning permission
2. obtaining a third party’s consent (for example superior landlord’s consent)
3. a site assembly condition

It is crucial that the terms of the condition are clear. 

• The contract addresses
• how, when and by whom the condition should be satisfied
• whether a party has the ability to waive the condition
• termination rights in the event that the condition is not satisfied by a specified date

Why do I need a conditional contract?

Conditional contracts may be used to sell real estate, vehicles, equipment, and other personal property. Some parties do not want to enter into conditional contracts because they do come with risk and possible uncertainty and will only enter into them if absolutely necessary.

You may also require a conditional contract if you are waiting for information from a local authority, or some other consent is required.

Why talk to Birkett Long Solicitors?

At Birkett Long, our commercial property solicitors can advise you whether or not a conditional agreement is appropriate to your proposed development. This is as important to the agreement itself, because if a different agreement is more appropriate, your development may not progress in the way you wish.

Whether you are buying or selling a property for development, we can negotiate and draft a conditional contract for sale and advise you of the implications. Many possible eventualities and circumstances need to be accounted for.

As a conditional contract will bind a purchaser if planning consent is granted, it is important that we undertake all necessary searches and enquiries prior to exchange of agreements.

What are the benefits of a conditional contract?

Applied in the correct circumstances, a conditional contract can be beneficial for both the buyer and seller. 

It can allow for a contract to be entered into whereby;

• works can be done
• planning permission obtained, or 
• other matters resolved by one of the parties, with the security that the property will be purchased or sold once a task has been completed.