Overage Payments

An overage is a common term found in most land purchases and is often written into a contract of sale.

In the context of land sales, an overage (also called “claw back”) is used to describe a sum of money in addition to the original sale price which a seller of land may be entitled to receive following completion if and when the buyer complies with agreed conditions.

Selling on a parcel of land or obtaining planning permission on land are examples of conditions which can trigger an overage clause.

Below is an example of an overage clause that is common in most land purchases:

As additional consideration for the sale of the Property the Transferee for itself and it successors in title hereby covenants with the Transferor to pay Planning Consultants (UK) Limited (Company Number 4339423) ("the Company") on each sale of the Property or any part thereof completed prior to 31 December 2063:

4.9% of the gross sale price or (if higher) the then the open market value of the land transferred; and

A sum of £395 on each sale which shall thereafter be doubled on the first and each tenth anniversary of the date hereof

Provided that the Company shall have the option (to be exercised within 20 days of the Company being notified of any such sale by notice in writing to the notifying party) to refer the question of whether the notified sale price does not represent the full open market value of the land transferred to the decision of an independent surveyor appointed (in case the parties cannot agree an appointment) by the President for the time being of the Royal Institution of Chartered Surveyors on the application of either party and the decision of such independent surveyor shall be final and binding on the parties.

To make an overage payment, please instruct your solicitor to email us at Overage@PlanningConsultantsUK.co.uk.

To avoid delays please use email.