Land: Understanding Overage Provision in Property Ownership
Are you the owner of land subject to overage provisions and wondering what to do next?
In this article, we'll shed light on overage provisions, also known as uplift or claw back clauses, and provide guidance on how to navigate them effectively.
What Are Overage Provisions?
An overage provision is a contractual term commonly used in property transactions, particularly when a previous property owner is entitled to an additional payment under specific circumstances. Typically, this payment is triggered by events such as the grant of planning permission or the development of the property. While overage provisions are often associated with land or large buildings suitable for development, they can also affect properties with substantial unbuilt land, including large houses with outbuildings, spacious gardens, and paddocks.
Understanding the Complexity of Overage Provisions
Overage provisions can be intricate and challenging to decipher. They impose an obligation to pay a potentially significant amount of money if a hypothetical event occurs, usually the implementation of a planning permission or the sale of a property. The parties involved in overage agreements often have opposing objectives: the seller aims to maximize the payment, while the buyer or future owner seeks to minimise it.
Is Your Property Affected by Overage Provisions?
Overage provisions require the agreement of two parties, typically the seller and the buyer, during the initial property transaction. If you've purchased land subject to overage, your solicitor would likely have informed you about it during the buying process. These provisions usually run with the land, binding future owners, so your solicitor should have made you aware of them.
How Can Lawson-West Assist with Your Overage Situation?
Many property owners do not fully comprehend the complexities of their overage provisions. These agreements can last a long time, and people's recollection and understanding may vary. If your property is subject to overage, Lawson-West can help by reviewing the overage provision and other title documents, clarifying the main points for you.
We often assist clients who are preparing to sell or mortgage a property with overage provisions. It's advisable to address these provisions before putting your property, as they can influence potential buyers. For instance, we recently reviewed the title of a house with development potential but had an onerous overage provision. We recommended approaching the overage owner to negotiate changes that would benefit both parties with the help of specialist land agent, potentially increasing the property's development prospects.
Consult Lawson-West Solicitors' Expertise
Lawson-West's commercial property team has extensive experience dealing with overage provisions. We can provide expert advice to make your property more attractive to potential buyers while maximising your return. If you'd like to discuss your overage situation, don't hesitate to contact our team today. Contact Us.
Russell Dowling, Senior Commercial Property Solicitor
Solicitor, Lawson-West Solicitors
Tel: 0116 2121079
rdowling@lawson-west.co.uk
This article is not intended to be legal advice and cannot be relied upon or applied to any set of circumstances. For further guidance, please contact Lawson West Solicitors Limited.
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