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  • FIRST POST
    • Mr.Jelly
    • By Mr.Jelly 4th Oct 17, 10:46 PM
    • 13Posts
    • 0Thanks
    Mr.Jelly
    Overage vs ransom strip when selling
    • #1
    • 4th Oct 17, 10:46 PM
    Overage vs ransom strip when selling 4th Oct 17 at 10:46 PM
    I am selling a quarter acre plot with a bungalow on it that backs onto agricultural land. The farmer would like to put 30 houses on this land which is currently outside the village envelope. The village has no neighborhood plan at present, and there would be local opposition as well as there not being any easy access to the fields. So the possibility of my plot being used to provide an access road to a new development is rather hypothetical. However, I would be irked if the land became a lot more valuable shortly after I had sold it.

    This made me wonder whether some form of overage/covenant or ransom strip at the back of the plot could be used to avoid future regrets without too adversely affecting the sale price or incurring substantial legal expenses. Some online opinions I have read suggest that overage clauses can incur liabilities to extra capital gains tax for the seller and stamp duty for the buyer. On the other hand, setting up a ransom strip at the back of the plot might involve other legal and professional expenses and delays. Does anyone have any relevant experience or advice that could apply to this situation?
Page 2
    • Mr.Jelly
    • By Mr.Jelly 5th Oct 17, 9:52 PM
    • 13 Posts
    • 0 Thanks
    Mr.Jelly
    As a buyer I'd find this disgusting and wouldn't dream of buying it.

    If someone buys a used car, renovates it and increases its value it's unheard of that the former owner would get any of the profit. Why do some people accept it with property?
    Originally posted by glasgowdan
    Yes, well in this case the increase in value would be an effectively unearned windfall due to a change in planning policy mainly benefiting the farmer whose land shoots up in value by the stroke of a pen. I wouldn't say anyone has a greater moral claim on that money than anybody else.
    • chappers
    • By chappers 6th Oct 17, 2:45 PM
    • 2,956 Posts
    • 1,704 Thanks
    chappers
    but will presumably sell for a large gain based upon its then status compared to its previous status a mere 50ft strip of isolated garden land
    Originally posted by 00ec25
    Depends upon how it is sold, the OP could keep possession of the land and instead sell an easement over it.
    • lincroft1710
    • By lincroft1710 6th Oct 17, 2:47 PM
    • 10,053 Posts
    • 8,126 Thanks
    lincroft1710
    How many 4/5 bed houses could you get on your 0.25 acre, because in most areas, the bungalow would be bulldozed and very expensive houses built in its place
    • chappers
    • By chappers 6th Oct 17, 2:50 PM
    • 2,956 Posts
    • 1,704 Thanks
    chappers
    As a buyer I'd find this disgusting and wouldn't dream of buying it.

    If someone buys a used car, renovates it and increases its value it's unheard of that the former owner would get any of the profit. Why do some people accept it with property?
    Originally posted by glasgowdan
    would be unusual to find this in a straight forward residential property deal but happens all the time in commercial deals or for example where a piece of land was sold with outline planning permission.
    • leslieknope
    • By leslieknope 6th Oct 17, 3:20 PM
    • 314 Posts
    • 469 Thanks
    leslieknope
    but you didn't invest anything in the property. you inherited it. so any return will be a profit for you. i think you'll be hard pressed to have your cake and eat it too.
    CCCC #33: £42/£240
    DFW: £4355/£4405
    • Davesnave
    • By Davesnave 6th Oct 17, 8:03 PM
    • 23,712 Posts
    • 89,694 Thanks
    Davesnave
    but you didn't invest anything in the property. you inherited it. so any return will be a profit for you. i think you'll be hard pressed to have your cake and eat it too.
    Originally posted by leslieknope
    OP has asked a question regarding maximising the return from an inherited property, which is a legitimate topic for this forum.

    "Not investing anything" has nothing to do with it, but as some of us have pointed out, trying to anticipate an uncertain future value through some sort of restriction on the title will negatively impact the the price others will pay, if they'll buy at all. Everyone wants all of the cake.

    It's also presumptious to assume that a probate property has had 'no investment' from those inheriting, as some may have made considerable personal sacrifices keeping an elderly person in their home, rather than in care.
    'A society grows great when old men plant trees whose shade they'll never sit in.'
    • leslieknope
    • By leslieknope 6th Oct 17, 10:40 PM
    • 314 Posts
    • 469 Thanks
    leslieknope
    OP wants to hold a piece of land at ransom because he *thinks* that the property might increase in value should a potential scenario occur. good luck finding a mug happy with that deal i guess.
    CCCC #33: £42/£240
    DFW: £4355/£4405
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