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ARTICLE · 27 NOVEMBER 2017

Five Essential Factors In Overage Agreements

Taylor Vinters
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Overage agreements have been in the news recently. Leading agents say that negotiating overages can add several months to the conveyancing process...

United KingdomReal Estate and Construction
Andrew Williamson
Andrew Williamson
Louise Moore
Louise Moore

Overage agreements have been in the news recently. Leading agents say that negotiating overages can add several months to the conveyancing process, yet these complex agreements are becoming increasingly popular.

What is an overage agreement?

Also known as claw-back or uplift, an overage is an agreement that the buyer will pay extra, on top of the original purchase price, if and when certain events happen. For example, if the buyer increases the value of the land by obtaining planning permission.

Why are  overages popular? If you're a seller, it means you can still benefit from an increase in the value of your land, after you've sold it. So if you sold a couple of fields and your buyer subsequently gains planning permission to build 80 houses on them, you can claw back some of the increase in the land's value.

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