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Uplift Clauses On House / Land Sale
3 Answers
Hi all, looking at a property that has recently come onto the market, with a bit of land and what we consider quite a low price for what it is. However, there is a 25% Uplift Clause for a period of 20 years.
We don’t plan on selling any of the land to build on, nor split it up. We will perhaps modernise and do a small extension (without the need for planning) However I have a couple of questions:
1) If we sold the house in say 15 years, would the new owners have this uplift clause applied still?
2) How negotiable are these things?
We don’t plan on selling any of the land to build on, nor split it up. We will perhaps modernise and do a small extension (without the need for planning) However I have a couple of questions:
1) If we sold the house in say 15 years, would the new owners have this uplift clause applied still?
2) How negotiable are these things?
Answers
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As far as I know, funk, yes, the clause is transferable to subsequent owners.
Here's a potential problem. Mortgage Companies often run away fro these things. I'm thinking here of your possible future buyer's mortgage.
Negotiable? Yes, prior to Contract. NOW is the time if you want to go ahead.
I can't stress enough how important proper legal advice is here.
Your extension may not even "trigger" the clause payment, but I wouldn't risk it without sound advice.
You may have gathered that I detest these things, and have always avoided them. My thinking is that if a seller wants a further piece of the pie, then he should get his own PP and sell the "garden" separately, rather than leaving you to do all the work.
However, legally, it's all doable, but you must be advised well.
Here's a potential problem. Mortgage Companies often run away fro these things. I'm thinking here of your possible future buyer's mortgage.
Negotiable? Yes, prior to Contract. NOW is the time if you want to go ahead.
I can't stress enough how important proper legal advice is here.
Your extension may not even "trigger" the clause payment, but I wouldn't risk it without sound advice.
You may have gathered that I detest these things, and have always avoided them. My thinking is that if a seller wants a further piece of the pie, then he should get his own PP and sell the "garden" separately, rather than leaving you to do all the work.
However, legally, it's all doable, but you must be advised well.
Quote:
"The mechanism for protecting uplift payments has repercussions on future conveyancing of the land throughout the uplift period. This is because the original covenant to pay the uplift is a personal covenant between the original seller and the original buyer. The seller cannot enforce this obligation against subsequent buyers unless he takes a new covenant from each and every one of them. Accordingly, he will arrange for a restriction to be placed on the register, so that the property cannot be sold unless his solicitor certifies that the buyer has covenanted to observe the uplift provisions. This adds to the cost of conveyancing, and can cause delays. This is frustrating, especially when there is no realistic prospect of development, or no intention to develop".
Source:
https:/
"The mechanism for protecting uplift payments has repercussions on future conveyancing of the land throughout the uplift period. This is because the original covenant to pay the uplift is a personal covenant between the original seller and the original buyer. The seller cannot enforce this obligation against subsequent buyers unless he takes a new covenant from each and every one of them. Accordingly, he will arrange for a restriction to be placed on the register, so that the property cannot be sold unless his solicitor certifies that the buyer has covenanted to observe the uplift provisions. This adds to the cost of conveyancing, and can cause delays. This is frustrating, especially when there is no realistic prospect of development, or no intention to develop".
Source:
https:/
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