Solicitors in Essex & London
Overage allows a seller of land to benefit from any later increase in the value of the land being sold, even after they no longer legally own it. These kinds of clauses can be notoriously complicated and it is vital they are carefully drafted in order to fully protect the vendor’s position. Our land development solicitors in Essex and London have a wealth of experience in dealing with overage clauses.
Naturally, a seller wants to obtain the best sale price they can for the land. It is now common for vendors to include provisions in sales deals that if the land being sold is later developed, which results in the land increasing in value, then this will result in a further sum of money being due to the seller.
The overage provisions will provide for a time period on how long the overage is to apply for and will include a formula as to how any payment which may be due to the seller will be calculated. Overage can bind not only the initial buyer but subsequent buyers too depending on how long the overage period is to last for. Overage can be based on sales revenue and/or habitable rooms.
Essentially, overage clauses allow a landowner another “bite of the cherry” without having to develop the land themselves or having the costs associated with doing so.
If you require further advice relating to the drafting and legal implications of an overage/clawback clause as a developer, please feel free to contact any of our land development solicitors directly. We operate out of five offices across Essex and London, or, if more convenient, we are happy to meet you onsite at your own premises.