{"id":22848,"date":"2019-09-18T13:34:28","date_gmt":"2019-09-18T12:34:28","guid":{"rendered":"http:\/\/www.propertysurveying.co.uk\/newsletter\/?page_id=22848"},"modified":"2020-07-08T15:04:54","modified_gmt":"2020-07-08T14:04:54","slug":"overage-agreement-explained","status":"publish","type":"page","link":"https:\/\/www.propertysurveying.co.uk\/newsletter\/?page_id=22848","title":{"rendered":"Overage Agreement explained in light of recent High Court ruling"},"content":{"rendered":"\r\n
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\"buildersProperties and land are often sold if there is a potential for increased value with an overage agreement.<\/strong><\/p>\r\n

Case law has recently addressed the clause that is often used: \u00e2\u20ac\u0153detailed planning permission\u00e2\u20ac\u009d which is not defined in a planning law sense, with defining consequences for many overage agreements. <\/strong><\/p>\r\n

What is an Overage Agreement ?<\/h5>\r\n

This is an agreement that the buyer will purchase a legal estate (property, land or other legal estate) and agrees to pay extra when a specific event happens which is usually with land or property when an increase in value is obtained by the approval of a planning permission.<\/p>\r\n

An example of this would be where a house is sold with a paddock upon which is a stable that might get planning permission for a further residential property. This might significantly increase the value of the paddock.<\/p>\r\n

An overage agreement in this scenario enables the seller to benefit from an increase in the value of the property after it is sold but also benefits the purchaser enabling them to buy the property at a lower price, based on its existing use.\u00c2\u00a0 The purchaser knows that they have the opportunity of increasing the value, albeit that some of that value added is passed on to the original owner.<\/p>\r\n

Specific terms are agreed in overage agreements that usually include:<\/strong><\/p>\r\n