The purchase option right or call option in Spain

The option right arises from a bilateral agreement between the option grantor and the option holder, in which the option grantor grants the option holder an exclusive option right – usually to buy – for a certain period of time.

 

The main advantage to the option holder or optionee is that they can decide whether or not to exercise the option unilaterally and on their own initiative. In this way, they can oblige the grantor – the owner of the asset in which the option holder has an interest – to sell and transfer the property within the specified period, without any conditions having to be fulfilled. This feature clearly distinguishes the option right from the right of first refusal, since the latter requires prior action by third parties and the owner.

 

In the vast majority of cases, however, this benefit for the option holder is not free of charge, and the option grantor demands payment of a price, known as the “option premium”, in return for granting the option right. This premium can be paid as a one-time payment or in instalments.

 

During the period agreed by the parties, the grantor of the option cannot freely dispose of his assets, whereby this restriction is supported by the publicity of the land registry in which this option right can be registered, as will be explained below.​

 

​The great advantage of this institution is that it can be registered in the land registry in accordance with Article 14 of the Spanish Mortgage Regulation and thus guarantees the option holder the greatest possible legal certainty both between the parties and with regard to third parties. However, unlike the exercise of the option, the consent of both parties is required for the entry.

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