Difficulty: Easy

Average Score: 100%

Under an option to buy, the ownership of land will change when the

Rationale

Ownership of land will change when the optionee exercises the option.

The ownership transfer occurs when the optionee decides to exercise their right to purchase the land as stipulated in the option agreement. This is the critical moment that legally binds the seller to transfer ownership to the optionee.

A (option is signed by the parties.) YOUR ANSWER

Signing the option agreement merely establishes the terms under which the optionee may purchase the property; it does not transfer ownership. Until the optionee exercises the option, the seller retains ownership rights, and the agreement functions as a unilateral contract offering a right to buy.

B (optionor does not fulfill the obligation.) YOUR ANSWER

If the optionor fails to meet their obligations, this does not result in ownership transfer. The optionee still retains the right to exercise the option, but ownership will change only if they choose to do so. Unfulfilled obligations may lead to legal consequences for the optionor, but they do not automatically confer ownership to the optionee.

C (optionee exercises the option.) CORRECT

Exercising the option is the definitive action that triggers the transfer of ownership. When the optionee formally decides to purchase the property as per the option agreement, the ownership rights change hands, completing the transaction and fulfilling the conditions of the contract.

D (specified time has expired.) YOUR ANSWER

The expiration of the specified time in an option agreement means that the optionee can no longer exercise their right to purchase the property. If the option is not exercised before the deadline, no ownership change occurs, and the seller retains full ownership of the property.

Conclusion

In summary, ownership of land changes hands when the optionee exercises their right to purchase as outlined in the option agreement. The mere signing of the option, the optionor's obligations, or the expiration of the timeframe do not affect ownership transfer. The specific act of exercising the option is what legally binds the parties and facilitates the transfer of property ownership.

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