Option Fee Clause -Please Read And Provide Feedback
Hi All,
I took an existing L/O document and made some changes to the Option Fee Clause. I dont know if it is common practice to allow monthly installments for the payment of the option fee but it is something I am leaning towards.
My idea is that if a potential lesee has maybe 8k to pay upfront as an Option Fee but is willing to pay as much as $12k then I can accept installments for the balance. Not only can I get more leverage on what I ask for as an Option Fee but I would also see more more money from the non-refundable service fee (Thinking maybe 10% of the balance).
Here is an excerpt: I am new to this so please let me know if I am way out of line in my thinking.
1. OPTION FEE: Optionee agrees to pay $_____________ as a NON-REFUNDABLE FEE, as consideration for the Optionor to grant the Option to Optionee to purchase the above premises. The Optioner agrees to credit the amount of the Option Fee in the form of a discount towards the negotiated purchase price. Simultaneous with the execution of this agreement, the Non-Refundable Option Fee must be paid in full by the Optionee in available funds, unless Optioner has granted Optionee the option for monthly installments for the full and final satisfaction of the Option Fee.
Where an installment agreement exists between Optioner and Optionee for the payment of the Option Fee, Optionee agrees that the Option Fee will be subject to an additional Non-Refundable Service Fee in the amount of $________. This service fee shall bare no credit towards the purchase price or the Option Fee.
Under the terms of the installment agreement, the Optionee shall deposit the sum of $__________ along with the above financing fee to the Optionor. The Optionee shall then be responsible for monthly installments in the amount of _______ for the balance of the Option Fee, with the first installment being due on ________________ and with all subsequent installments being due on the_________ day of every calendar month until the Option Fee balance have been satisfied in full. All installment agreements shall be for a period no longer than 12 months. In the event that the Optionee defaults on the installment agreement for the payment of the Option Fee then the Optionee’s option for the purchase of the above premises shall be null and void.
Comments(0)