Alastair Woodgate, Director of St Albans and Watford’s leading local Chartered Surveyors, Rumball Sedgwick, takes a look at one element of property negotiation that can be complex – overage.
Overage is sometimes referred to as clawback. An overage clause is typically used when a property is sold, to enable the seller to share in any future uplift in value say if and when planning permission is granted for additional development that enhances the value of the property.
It is conditional on a defined trigger point occurring, at some time after the date of sale. The amount can be fixed or it can be variable, according to a formula set out in the contract of sale.
This isn’t a one size fits all, in fact, every overage agreement is unique. Want to know more?