Put and call option precedent deed
Click here to read about Put and Call Options. Click here to read about Conditions Precedent. The ATO has accepted that both methods work, as long as they are drafted properly. Unfortunately, it is not enough to simply provide that, if an Insured Event occurs, there will be a sale of the Equity. Put and Call Options require a party to know it has an Option and then to exercise it within the required time. The Contract of Sale will only be created when the Option has been exercised. However, in the case of a Death or Disability, there can be delays in locating a valid Will, identifying the Executor or Trustee or Attorney in the case of a Disability , becoming aware of the existence of the Option and exercising it.
This can frustrate the intention of the Option and prejudice the interests of the parties. In the case of Conditions Precedent, the Contract of Sale will be created automatically upon the occurrence of the Insured Event. Therefore, a party cannot be prejudiced by their ignorance of the existence of the Option.
The last conveyance or acknowledgment prior to Book Indicate whole "W" or part "P". Not required if dated on or after 1. Staff processing information An option of first refusal must be entered under the General Frame, ie code "G".
The situation of the land. If Old System land is affected and: Drafting impacts whether a nominee is duly appointed and in what capacity the nominee acts, namely: The case involved the appointment of a nominee under a call option over land in New South Wales. The ability to nominate another entity to exercise an option provides a practical and flexible solution.
The challenge is in determining how the nomination provision should be drafted. Also, the drafting of the nomination provision is not the end of the matter.
If a grantee decides to appoint a nominee, the circumstances and drafting of any arrangement between the grantee and nominee may also trigger a stamp duty liability.
Relevantly, the key stamp duty drafting issues for options over land in New South Wales are as follows:. There is a clear intention in the duties legislation in New South Wales to charge duty on a nomination under a call option if there is also a put option in place. The opportunity for drafting is key in where there is only a call option. If it was an assignment of the option it was liable to transfer duty the top marginal rate is 5.