Overage – Be Careful With Those Triggers!

London & Ilford Limited v. Sovereign Property Holdings Limited [2018] EWCA Civ 1618 is another salutary reminder to any party negotiating overage provisions of the need to spell out clearly and expressly all the conditions that will trigger the payment of additional sums.

Background

London & Ilford Limited (L&I) purchased a property in Ilford from Sovereign Property Holdings Limited (Sovereign). The consideration payable was the purchase price of £7,350,000 plus L&I's obligations under an overage deed.

Under the terms of the overage deed an additional payment of £750,000 would be due from L&I to Sovereign upon:

"the receipt by [L&I] of a Prior Approval in relation to a proposal for the Development relating to a minimum of sixty (60) Residential Units … ".