Suppose that a development group would like to determine if the local zoning and land-use ordinances will permit the type of development they desire. However, they do not want to be obligated to purchase the property if they find that their proposed development will not be permitted. To gain control of the site without being obligated to perform, the development group should purchase which of the following?
A) Ground lease
B) Option
C) Fast-track
D) Floor loan

Question

Quizplus · Accepted Answer

An option is a contract that gives the holder the right, but not the obligation, to purchase the property at a specific price and within a specific time frame. In this scenario, if the development group purchases an option on the property, they have the right to purchase it at a later date if they determine that their proposed development will be permitted by the local zoning and land-use ordinances. However, if they find that their proposed development will not be permitted, they can simply choose not to exercise their option and are not obligated to purchase the property. This gives the development group control over the property without being obligated to perform. A ground lease is a long-term lease agreement for land, a fast-track is a method of expediting a project, and a floor loan is a type of loan used in construction projects. None of these options would provide the same level of control as an option.

Suppose That a Development Group Would Like to Determine If