Question 62

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

Ownership of land will change when the optionee exercises the option, as this action signifies the optionee's decision to purchase the property under the terms agreed upon in the option.

A) option is signed by the parties.

While the signing of the option by the parties is a necessary step in the process, it does not itself transfer ownership. The option merely grants the optionee the right to purchase the property in the future but does not result in a change of ownership until the option is exercised.

B) optionor does not fulfill the obligation.

If the optionor fails to fulfill their obligation, it does not lead to a change in ownership. Instead, it may provide grounds for the optionee to take legal action or seek remedies, but ownership remains with the optionor until the option is exercised.

C) optionee exercises the option.

Exercising the option by the optionee is the definitive action that results in the transfer of ownership. Once the optionee exercises their right to purchase, the ownership of the land legally shifts from the optionor to the optionee under the terms stipulated in the option agreement.

D) specified time has expired.

The expiration of the specified time does not automatically result in the transfer of ownership. If the optionee has not exercised the option before the expiration, the option simply becomes void, and ownership remains with the optionor.

Conclusion

The correct answer is C, as the exercise of the option by the optionee is the critical action that initiates the transfer of ownership. All other options fail to address the necessary action required for ownership change, underscoring that it is the exercise of the option, and not merely the signing or expiration, that defines the moment ownership is transferred.