contract-law england-and-wales property
Negotiating ‘Uplift overage’ on property (UK)
<p>I am interested in purchasing a home nearby. The purchase is not insignificant, but it has only just been brought to my attention that the vendor has a ’uplift overage’ on a portion of the land that comes with it. The exact wording is:</p>
<blockquote>
<p>Should any future buyer obtain planning permission to construct a separate dwelling on the additional land, the seller reserved the right to an uplift overage payment totalling 20% of the future present-day value of any building plot with consent for permission to build is implemented. Such agreement will be incorporated into the Legal Sale Agreement drafted by the vendor’s solicitor.</p>
</blockquote>
<p>Having spoken to the vendors, it’s clear that this is entirely speculative on their part; they have said they have never considered or pursued planning permission, yet they would ‘kick themselves’ if someone else developed on land that they sold. Since they’ve done nothing to pursue this opportunity themselves, this kind of irks me; but they also have this overage in place for <em>the next 30 years</em>. Considering they’ve been there for only 15 years themselves, this irks me more.</p>
<p>I have asked for details but haven’t had anything in black &amp; white yet; but am I right in reading that this isn’t actually in place <em>yet</em>, and will be added to the deed at the point of sale? And if so, can this be negotiated down (or, ideally, into oblivion)?</p>
<p>I have no plans to build ‘another dwelling’ (especially as close as it would be to the house); but my concerns are that:</p>
<p>a) if I did <em>anything</em> on that land (for example built an indoor pool as an annex to the house), they would then try to claim 20% of the <strong>total</strong> sale value; and</p>
<p>b) if my circumstances change and I need to sell the house for whatever reason, I’m then stuck with trying to hawk an unappealing overage (that I didn’t really want) on the property &amp; deeds that benefits someone who hasn’t been lived there for 20 years or more.</p>
<p><em>tl;dr:</em> can a 30-year speculative overage be negotiated away or perhaps challenged as unreasonable after the fact?</p>

<h2>You can negotiate whatever the vendor’s will accept</h2>
<p>Or, if the deal is not worth the “irks”, don’t do it.</p>
<p>My understanding is that your chance of successfully challenging this as unconscionable are essentially nil - such clauses are commonplace and you are under no duress from the vendor to enter the contract.</p>
<p>As written, it does require a “seperate dwelling” to be constructed - an extension of the existing dwelling or a structure that was not a dwelling (e.g. a mobile phone tower) would not trigger the uplift.</p>
<p>As stated above, you can negotiate whatever you can negotiate. Pay more now to remove the uplift clause, pay more now to have it end earlier or taper off, offer less now to accept the clause. If you can negotiate something acceptable to both the vendors and you, congratulations, you’ll own a house. If not, you won’t.</p>
