Legal Wise Moneysavers - what does this mean...

vansboy

Looking at a house that certainly needs 'doing up', does this note on the agents details mean that if we improve it, assuming we buy it, we have to pay out again, to the sellers. Or is it only if we were to knock it down & redevlop as a site??

Agents Note:
The property is being sold by way of two separate Contracts. With the purchase price being apportioned between them. Each Contract will contain an overage clause allowing the sellers to claw back 50% of the increase in the value of the property being sold as a result of the grant of planning permission for residential development for a period of 21 years.


Thanks in advance.

VB

jonesMUFCforever

I wouldn't touch this with a barge pole.
Someone is selling a dump cheaply, you pay to do it up and when you sell up you are expected to give up half of the increase in value.
Walk away!

Herb

this is becoming more regular as I have seen it a couple of times - though it was commercial property - I'd love to know more???????

Bossyboots

It is actually saying they want half the profit made as a result of invoking planning permission. I would hazard a guess that there is planning permission for a development there, or the sellers know this would be possible.

You would think though that they would sell straight to a developer so there has to be a fly in the ointment somewhere.

I agree with ejones999 though - walk away.

clutton_2

walk away ..........

ixwood

I'd guess it's a nice plot of land (or maybe has a nice plot of land) that could house 2 or 3 new builds and make a mint, BUT there's a problem with planning.

So, they flog it, BUT if you do get permission to knock it down and build money pots, then they want a share.

Greedy property developers!!

sarahlouise210

I am not so sure I would walk away ...as has been said - it seems the property comes with considerable possibility for redevelopment (or they would not bother with the clause) if you just want to live in it ..then fine. If planning permission for several houses or flats is later granted and you want to sell ..then OK you have to give up 50% ..but you will still be left with 50% of what I imagine would be a good profit. It has to be worth thinking about - if you live in it and sell it on once you have done it up then you would not have to pay anything - only if its sold for redevelopment.

clutton_2

the problem with this is - who pays the Capital Gains Tax (40%) ? if the purchaser pays it all, s/he will be left with about 10% profit - and that is way too small when you consider the vagaries of the property market.

Andy_L

Would the price you pay not reflect the claw back?