Landowners selling land will often be aware that the buyer may be in a position to profit from their purchase in the future by, for example, gaining planning consent to erect new houses on the land. The seller may wish to participate in that future profit. An overage agreement can make that possible.
Overage agreements are, by their nature, complex both to negotiate and to draft. Particular issues include:
- How to calculate the increase in value of the land in question?
- What should be the duration of the agreement?
- How will the conditions that trigger the agreement be defined?
- How to ensure payment under the terms of the agreement when it is triggered?
In helping clients to maximise the value of their land sales through the use of overage agreements, specialist solicitors at Longmores can bring to bear not only their fund of legal knowledge but also considerable practical experience in this particular, complex area.
Our approach is practical, no-nonsense and robust. We take time to understand the reasons why you seek to use an overage agreement and assess the options that best serve your interests, whilst keeping cost under control.
The use of an overage agreement can give rise to a variety of tax and other issues. Where appropriate, we will collaborate with experts in other fields such as accountants, tax advisers and valuation experts.
Clients who work with us on overage agreements work with us in areas such as rural land, development and buying and selling commercial property.