Overage

[bob561941]

Has anyone bought a parcel of land with overage clause on it. Overage gives the vendor a per cent on any increase in the value of the land if planning permission is obtained in the future.I would be interested to hear from anyone who has had to pay overage.

[Marshwarble]

This can only be a set up...

[murraymints]

would not go near it with a barge pole !

[naomi24]

I've never entered into such an agreement and would be very cautious about doing so, but it's not a set up.

https://en.wikipedia.org/wiki/Land-sale_overage

[The Builder]

Quite common I'm afraid, Bob. I've been presented with these a couple of times, and just walked away.

I really don't like the idea, although I can see why they do it. Quite understandable really. It's a classic case of "having your cake and eating it too."

It's Ok if a fixed sum is mentioned, but usually it's open-ended. If Permission is given sometime in the future, a valuation and figure would have to be agreed. There's enough aggravation with Planning and bureaucracy without all that.

Entirely legal of course. Any project could still go ahead successfully. It has to be your choice alone.

[Marshwarble]

I meant the *post* was a set up.

[atalanta]

here's an example : a pub fails, and the brewers cannot see a profitable future for it. It is put up for sale as a pub, since planning permission for anything else cannot be obtained. The locals get together and bid to buy it and run it themselves as a community asset. The brewers suspect that this, too, will fail, and the community will have to sell it for redevelopment in a few years time, having shown that it has no future as a community asset. The value for redevelopment will be ( say) double the value as a useless pub, so the brewers want to hang on to get some of the value they would have got if they themselves could have got planning permission. Must be a common problem.

[themas]

Bob - if you wish to buy some land with such a condition I suggest you get advice from a solicitor who is very experienced in this area. Otherwise you risk being taken to the cleaners. To my mind some things are basic - the formula for calculating the increase must be spelt out in the contract & be watertight; there must be a time limit on the arrangement; any resulting payment must become due only when the land is sold - not when planning permission is obtained.