Effect of overage on land value/price

Discussion in 'Agricultural Matters' started by Kidds, Mar 17, 2019.

  1. Tarw Coch

    Tarw Coch Member

    If the agreed price is reasonable and given that it’s family you’re dealing with I’d just crack on.
    Had exactly the same happen 25 years ago, bought some land off my late uncles widow then they added a 50% uplift clause with a 25 year lifespan. That made no difference to the bank and we borrowed every penny.
    I very much doubt wether it will ever come for building, at least not in my lifetime so was fairly pointless but kept the sellers happy.
     
  2. Forage Trader

    Forage Trader Member

    Location:
    Ceredigion
    Seems like if he sells it with planning on, at a further date he has to give a percentage back to the previous owner
     
    Last edited: Mar 17, 2019
    7610 super q likes this.
  3. Exfarmer

    Exfarmer Member

    Location:
    Bury St Edmunds
    What you must watch for are clauses which kick in if planning is granted, rather than if the land is sold.
     
    Two Tone, essexpete, Flat 10 and 2 others like this.
  4. curlietailz

    curlietailz Member

    Location:
    Sedgefield
    If it’s only 20% for 15 years then just buy it
    I’ve seen 50% for 80 years before
    Depends how much you want the land I guess
     
  5. Northeastfarmer

    Location:
    Cleveland
    Talk about a p!ss take
     
    multi power likes this.
  6. SIABOD50

    SIABOD50 Member

    Surely overage ,uplift what ever you want to call it is just plain GREED.
    If a person wishes to sell today at a given agreed price for today, what happens in the future should be of no relevance now. If development is a possibility, then don't sell it keep it.
    It's just wanting your cake and eating it .
    Would you try to you sell your house and , inform a buyer , by the way when it goes up in 10 years time I want a percentage.
    Uplift for 20 years ????
     
  7. SIABOD50

    SIABOD50 Member

    Exactly "previous owner ".
    I don't agree with this practice at all.
    It's just GREED.
    Why is it tolerated.?
     
    multi power likes this.
  8. You can impose whatever conditions you can get someone to accept when you sell something (so long as they are lawful and enforceable).

    We bought 105 acres of land with a range of traditional and modern buildings and a sound 3 bed bungalow in 2002 for £185k because we accepted a 32 page "Clawback Agreement". Around here the bungalow alone was worth about £200k then with vacant possession. It was too good a deal to ignore.
     
  9. jorgenbg

    jorgenbg Member

    Location:
    Oslo, Norway
    If you dont like it, walk away. Its a free world.
     
  10. No it isn’t a standard tactic in my experience. Solicitors do not advise on commerciality and if there is a change in the offer then the seller is responsible. Maybe the seller had some afterthought. As the buyer doubtless has a solicitor good advice is close at hand.
     
  11. Kidds

    Kidds Member

    Location:
    Warrington
    Yes, that is what is in there at present and will be changed.
    I am going to stick with my offer but minus all legal costs relating to the overage, any future legal costs to be met by them too.
     
    Nearly likes this.
  12. fieldfarmer

    fieldfarmer Member

    Would I be right in thinking in the above instance , say in ten years time the old owner or anyone for that fact could apply for planning permission on this plot even though he wont own it and if planning was granted even if the current owner didn't want it or act on the planning he would be responsible to pay on the % of the up lift in value.
     
    Exfarmer likes this.
  13. All depends on the detail of the written agreement. Is it triggered by GRANT of planning or by starting work? Does it state it only applied if the OWNER gains PP?

    Equally, if the agreement is weak you could buy the land and obtain PP to run a 5 pitch caravan site, pay the overage on that PP extinguishing it, then apply for PP for houses without having to pay the (much higher) uplift in value.

    Always read the small print.
     
  14. icanshootwell

    icanshootwell Member

    Location:
    Ross-on-wye
    Yes i quite agree. I hate people poncing of other peoples good fortune.
     
  15. icanshootwell

    icanshootwell Member

    Location:
    Ross-on-wye
    So in simple terms, what was the claw back agreement and how could it be applied in your case?
    A very good deal by the way.(y)
     
  16. In simple terms we could add buildings for agricultural use or telephone masts (which we did) without penalty. Sale of all or part triggers the 50% clawback (after deducting legal costs) and the clawback passes to the new owner with the new base price. Development other than agriculture triggers clawback payable AT GRANT OF PLANNING on the value uplift from gaining planning but then releases that portion from the clawback. There is a clause preventing gaining a low value permission to gain release them going for a higher value use. The agreement is enforced by a charge at land registry preventing change of ownership being registered unless the beneficiaries solicitors issue a certificate of compliance.
     
    icanshootwell likes this.
  17. It’s how it is now, deal with it.

    If you don’t like it then make an offer accordingly but don’t expect much success.
     
  18. Surgery

    Surgery Member

    Location:
    Oxford
    I would have it clearly defined as to what engages the uplift , ie residential or other building change of uses.

    Secondly go back to them wanting half all planning etc fees paid on planning permission given , might make them drop there uplift % or the % drops over the years on the timescale , that’s what we have done anyway
     
  19. itsalwaysme

    itsalwaysme Member

    Location:
    Cheshire
    There was a property came up for auction near me last year, guide price £450,000 ish if I remember rightly, it had a clause on it of a fair percentage and quite a number of years (can't remember the exact figures) It didn't sell, the family selling it had just been left it in a will, talk about greed, I wish someone would leave me close on half a million
     
  20. :eek:

    If ours had been for 80 years I'd have walked away or dropped our bid to a price which reflected the earning capacity of the land over 10 years (ie: not much being 40% landfill).
     

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