Overage Agreements, Clawback or sometimes Uplift are all expressions used to describe the same thing – A requirement by a Seller that the Buyer in certain circumstances at some stage after completion of the sale pays additional payments to the Seller for the same piece of land. It is crucial that this attempt to create an Agreement based around future outcomes is drafted by a specialist in this niche area. At Brady Solicitors we have expertise, experience and a pragmatic approach to ensure future value is realised.
Some key scenarios the Brady Solicitors’ Real Estate team have dealt with to maximise future value include:
- The seller sells the land at agricultural value with an expectation that its buyer will obtain planning consent for residential or commercial developments.
- The seller sells the land with the benefit of an outline planning permission for development with a concern that the buyer will be able to obtain a more valuable planning consent at a future date – for instance, residential.
- The seller sells the land with the benefit of an outline planning permission for residential development with a concern that the buyer will either be able to obtain a more valuable planning consent at a future date or otherwise achieve high sales values for the dwellings to be constructed and sold.
- The buyer simply sells the site within a short period to another buyer who pays more money for it – they “flip it.”
Getting your Overage Agreement right
When wrapping up an Overage Agreement it is crucial that one considers how security, covenants, payments and deductions are dealt with. How you represent calculations, using worked and tested examples, could be crucial to ensure the terms you believed were agreed are upheld in the event of a dispute. If these elements are not dealt with correctly then you could lose the complete future value.
Brady Solicitors are experts in overage and we can ensure Overage Agreements are drafted for clarity with worked examples that demonstrate that the agreement fulfils the parties’ agreed terms and intentions in order to avoid future challenges.