I understand the point of clawbacks. I see how they work. But I am getting concerned now that all land is having these tagged on. ALways worried about the standard Church "80 year" clawback. Today I have seen two pieces of land reserving "x"% uplift in favor of the vendors in perpetuity! Surely these cannot be legal can they? Dont they have tax implications?
Perpetual Development Clawbacks
- Thread starter franklin
- Start date
I've seen some of these and felt it would actually sound the death knell on a lot of speculative land purchase, to have a clause which effectively says at any point in the future if there is development and therefore an uplift in value means you or your descendants will benefit is absolutely mad, unless it is in your own favour of course.
- Location
- Darlington
So, If I sell my car, I can put an uplift on it that I can use it anytime I want in the next so many years???????????????
blondeagadvisor
Member
- Location
- Warwickshire
There used to be a limit on how long you could have an uplift for, I think it used to be about 80ish years. But they have now taken it away, so you can have a clawback for as long as you like...
Frodo
Member
- Location
- Scotland (east)
Surely it has to be prudent to have a time limit. I take it the right passes to the next generation and if so does it have to be specifically transferred or do each of your children get a share and so on. Must end up a nightmare if development takes place in 120 years time and you have to track down all the descendants. Even companies are unlikely to last that long.
No more difficult than manorial rights. Development rights clawbacks can be considered personal property, and hence passed on just like a chattel. And as it will be registered on the title, the onus would fall on the person wanting to build / develop to trace the owner of the right to be able to discharge it. Or pay an indemnity insurance. You would presume that it would impact the value of the land to an extent, but for something that has even the slightest of chances, then there is almost nothing to loose.
renewablejohn
Member
- Location
- lancs
There is everything to lose. I certainly won't touch any land with an uplift clause and I make it blatantly obvious that if the uplift clause remains then the sale will not go through. To date clauses have either been removed or compromise of maximum 15 years agreed.
So you do have claw backs then
I'm just about to give some one a price for a few acres, will be one price with claw backs and one without then he can take his pick, not that he'll like either price mind...
blondeagadvisor
Member
- Location
- Warwickshire
You are right, common sense would perhaps say it isn't practical to have one for so long, but it is completely down to individual's choice and usually they want their descendants to be able to benefit if they don't.
renewablejohn
Member
- Location
- lancs
So you do have claw backs then
I'm just about to give some one a price for a few acres, will be one price with claw backs and one without then he can take his pick, not that he'll like either price mind...
Only clawback is for development I can afford not to start for 15 years. Basically building up a land bank for the future at discounted prices that will never have the clawback exercised.
glasshouse
Member
- Location
- lothians
Clawback is a good thing as you pay less for the property and are not obliged to develop it.
- Location
- S.E
LOL you must be a land agent!
So, If I sell my car, I can put an uplift on it that I can use it anytime I want in the next so many years???????????????
if you sell your car subject to a contract that says so then I guess you can
glasshouse
Member
- Location
- lothians
i am a farmer.
Witham guy
New Member
- Location
- Lincolnshire
Clawbacks have become more prevalent due to the price difference between agricultural land and development land. I find clawbacks are a good thing, been approached by householders to buy plots of land adjacent to their homes only want it to extend their garden/ pony paddock/ dog walking area etc, etc. Come to an agreement on price with clauses attached only for use they first intended then they go off on one. I am only being prudent to cover my own back they are the ones wanting to buy under false pretences to make a massive profit shortly! Have purchased land with clawbacks too as long as understood at time no problem. No one can argue at a later date someone was conned due to ulterior motives I mean both buyer or seller.
glasshouse
Member
- Location
- lothians
If you are lucky enough to own a farm zoned for building, you dont have to wait your life away waiting for the build, you can just sell it with a clawback and move on.