Non payment of development/uplift clause

[Adam@Rumen]

Anyone ever been in or been aware of the situation of having to get money back for triggering a value increase development clause?


Reason I ask - a while ago some land about 10 miles away got sold with one on. Turns out pikeys have bought it... be fun trying to get a payment out of them?

Just curious.

 

[ISCO]

Overage/claw back should be protected usually by restriction on land registry preventing sale unless claw back complied with. This prevents sale unless payment made.
Another way to protect overage is to put charge on land which allows person wanting increased payment to sell land to obtain funds if not voluntarily made.

 

[Kidds]

What would you deem to be the increase in value of a traveller site and would it make up for the decrease of all the surrounding property values?

 

[rob1]

Assuming the land was sold without a large increase in price so it didnt trigger the uplift. If the clause was drafted properly and it was registered at the land registry there should be a restriction that means it cant be sold (registered at the LR) without the money due being held by the solicitors acting for those holding the right to the uplift. Of course that doesnt stop someone paying for it in cash but they wouldnt be able do anything with it re planning etc

 

[Doing it for the kids]

Watching this with interest!

 

[Hampton]

Personally I think a law should be in place that clawbacks can last no longer than 20 years.
Saw one the other day with a 35 year claw back. If you were buying it a 40-50 years old, that claw back would affect your grandchildren. Think it’s wrong.

I’d even go as far to say that ten years is long enough.
And no, I haven’t any land with clawback on

 

[ISCO]

Personally I think a law should be in place that clawbacks can last no longer than 20 years.
Saw one the other day with a 35 year claw back. If you were buying it a 40-50 years old, that claw back would affect your grandchildren. Think it’s wrong.

There used to be a view claw back could not be valid for more than 20 years however, it is now accepted it can be much longer. Local authority usually go 80 years.
I can't see problem with Claw back as if land is developed and there is a big windfall current owner would still get perhaps 50% of uplift which is not too bad.

 

[Still Farming]

Also do you need to keep an eye on this land for ever to see if anyone who owns it gets planning or is it an automatic land registry notification ?
Previous landowner that put clauses in and their heirs ,decendants ,how would it work as asked or just lost if no one kept an eye on it?
Then to get appropriate value off whoever???

 

[rob1]

most of mine is covered by one part by two, the first lasts for 21 years after the death of the last living decendant of george VI at the time of signing it.

 

[Hampton]

There used to be a view claw back could not be valid for more than 20 years however, it is now accepted it can be much longer. Local authority usually go 80 years.
I can't see problem with Claw back as if land is developed and there is a big windfall current owner would still get perhaps 50% of uplift which is not too bad.

I think that’s fine for a while, perhaps ten years, but after that I don’t think you should have any claim of it.
Imagine if it happened on houses! The housing market would collapse!

 

[rob1]

Also do you need to keep an eye on this land for ever to see if anyone who owns it gets planning or is it an automatic land registry notification ?
Previous landowner that put clauses in and their heirs ,decendants ,how would it work as asked or just lost if no one kept an eye on it?

should be registered

 

[Still Farming]

should be registered

So legal team,agents to get back for who ever survives the former owner of said clawback.

 

[Doing it for the kids]

Personally I think a law should be in place that clawbacks can last no longer than 20 years.
Saw one the other day with a 35 year claw back. If you were buying it a 40-50 years old, that claw back would affect your grandchildren. Think it’s wrong.

I’d even go as far to say that ten years is long enough.
And no, I haven’t any land with clawback on

its all negotiable when buying. Buyer either pays a lot more up front with no certainty of big money later on, or takes a hit on a big windfall down the line.

easier to pay uplift fees when you actually have the uplift!

 

[Still Farming]

its all negotiable when buying. Buyer either pays a lot more up front with no certainty of big money later on, or takes a hit on a big windfall down the line.

easier to pay uplift fees when you actually have the uplift!

Whose life time though

 

[Hampton]

Know of a 500 acre farm, bought in 1986 for £600k, sold in 2012 for £7m and has a 30 year clawback on it.
he owned it 27 years, received an 11,600% return on his money, and has a clawback on the land despite zero risk.
Is that reasonable?

 

[Doing it for the kids]

Whose life time though

sorry but I can’t see how it makes a difference.

if elders buy land and pay more for it due to no uplift, their offspring have less cash because of it but more chances of keeping a windfall.

likewise if father buys it cheaper with uplift clause, which never comes, father may buy 25% more farm for his money.

either way, offspring can’t complain!

 

[Hampton]

Disagree
It’s clawbacks, covenants, iht relief, interest only mortgages and a raft of other bull muck that is the reason farmland is unrealistically and ridiculously expensive

 

[rob1]

So legal team,agents to get back for who ever survives the former owner of said clawback.

I expect that sometimes it could be hard to trace the heirs of those who should receive the uplift, if an 80 year sold and then died a couple of years later they needed to have recorded who they leave the right to the uplift to, that person or persons might forget they have that right, its up to the current owner to find who needs to sign the release deed before it can legally be sold, ours has to be notified to a solicitor but after say 50 years they could well have no idea who to contact either

 

[ISCO]

Also do you need to keep an eye on this land for ever to see if anyone who owns it gets planning or is it an automatic land registry notification ?
Previous landowner that put clauses in and their heirs ,decendants ,how would it work as asked or just lost if no one kept an eye on it?

Claw back should oblige landowner to keep claw back beneficiary informed of planning application but they may not.
Keeping an eye on land is advisable if claw back on perhaps a small paddock suitable for perhaps 1 house for landowner.
If the trigger for payment is the grant of planning permission or implementation of planning permission it is possible that a house could be built and lived in by owner and you would not know. The land registry restriction will only be of benefit if house sold which may be in many years time.
This of course is not a problem if you are talking about large scale development as the houses will be sold by the developer.

 

[ISCO]

I expect that sometimes it could be hard to trace the heirs of those who should receive the uplift, if an 80 year sold and then died a couple of years later they needed to have recorded who they leave the right to the uplift to, that person or persons might forget they have that right, its up to the current owner to find who needs to sign the release deed before it can legally be sold, ours has to be notified to a solicitor but after say 50 years they could well have no idea who to contact either

This is true as with beneficiaries under a will sometimes difficult to find.