Effect of overage on land value/price

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.
 

SIABOD50

Member
Talk about a p!ss take
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 ????
 
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 ????
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.
 
This is a standard tactic for the sellers solicitor to make himself look useful.
Either of the above would be my reply...

AC
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.
 

Kidds

Member
What you must watch for are clauses which kick in if planning is granted, rather than if the land is sold.
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.
 
What you must watch for are clauses which kick in if planning is granted, rather than if the land is sold.
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.
 
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.
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.
 

icanshootwell

Member
Location
Ross-on-wye
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 ????
Yes i quite agree. I hate people poncing of other peoples good fortune.
 

icanshootwell

Member
Location
Ross-on-wye
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.
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)
 
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)
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.
 
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 ????
Exactly "previous owner ".
I don't agree with this practice at all.
It's just GREED.
Why is it tolerated.?
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.
 

Surgery

Member
Location
Oxford
I had an offer on some land accepted but now the seller has decided to put overage on it. I don’t mind the overage as the possibility of development is so low it just won’t happen, it certainly didn’t factor in the offer.
Being new to this game I now find that a mortgage would be very difficult as a result of the overage agreement. I don’t need a mortgage to buy it but I assume it also removes my ability to borrow using the land as guarantee. That may matter to me in the future.
I offered top dollar for the land (18 acres) but now feel this overage makes it worth less.

That was a long winded way to get to the “how much does an overage clause devalue land?” question.
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
 

itsalwaysme

Member
Location
Cheshire
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 ????
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
 

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