I need to draft an option to lease space in a building. Is there any problem with stating in the option that if the landlord does not permit the tenant to occupy the leased space and in turn permits another person or entity to occupy the leased space, then the tenant is entitled to treble damages with a maximum amount stated?

Also, what factors will determine if the price for the option is fair? Is there any problem with stating that the price of the option will be applied to the lease itself?

That price can be anything. If you want to give the option teeth, then make it recordable. That way you have a claim filed in the chain of title.

If you want the option to hold water, then make sure it has consideration. If you apply the consideration to the lease, then it could be argued that the option had no consideration.

Like B Line, i would also say that you should make it recordable and specifically describe the location within the building. Also, include a non-complete so that the landlord or any other tenant cant compete with you.

In the damages section make sure that your client, the holding of the option can enforce the option with specific performance. Consider also filing a UCC lien if the Maker of the option defaults.

Put a non-compete which obligates the landlord, its successors or assigns and all other tenants.

Can you record a option as an encumbrance on a deed of title?