Building with uplift clauses question.

Mgman1965

My son is in the building trade and we've had this idea to possibly save him some money for his first house and in an area he wants.


Our idea is to sell our house and buy another for cash, if were short, he will lend us the difference (so no hassle with building societies) with large garden suitable for building on. We then "sell" him the garden plot at a "reasonable" price, or even not if he's not needing a mortgage (he could buy the ground at a later date off us when better off,) for him to build his house on.


Question is, all the ones we deem potentially suitable have had large uplift clauses on for development.


If the development (new house) on the plot is not built to be sold, would that still trigger the uplift payment to the (I consider greedy) previous owner ?


If just selling the plot triggers the uplift, could we defer selling but still building, till the uplift expires ?


The only time I could possibly see the uplift being triggered is if the house and/or plot is sold for the first time within the uplift clause timeframe, which is it seems 25yrs for most and wouldn't be intended (I know things don't always go as intended but then we'd just have to pay up).


Anyone any experience of uplift clauses ? Or pitfalls.




Me and OH are only in our early 50's so no worries about Deprivation of assets or such like, so no tax scams or such intended.

moneyistooshorttomention

Well - you will have "uplifted" any of these plots when you buy them and hence the uplift clause:cool:

eddddy

Mgman1965 wrote: »

If the development (new house) on the plot is not built to be sold, would that still trigger the uplift payment to the (I consider greedy) previous owner ?

Typically, uplift clauses are triggered by the granting of planning consent. (No property sale is required.)



Just a thought... is it more greedy for a seller to want to use an uplift clause, so that the seller makes money out of any future development?

Or is it more greedy for a buyer to want to find land without an uplift clause, so that the buyer makes money out of any future development?

I guess your viewpoint depends on whether you are the seller or the buyer.

Mgman1965

eddddy wrote: »

Typically, uplift clauses are triggered by the granting of planning consent. (No property sale is required.)



Just a thought... is it more greedy for a seller to want to use an uplift clause, so that the seller makes money out of any future development?

Or is it more greedy for a buyer to want to find land without an uplift clause, so that the buyer makes money out of any future development?

I guess your viewpoint depends on whether you are the seller or the buyer.

Personally I consider it greedy on the part of the seller wanting their cake and eating it.


If you sell a piece of land (or house with a large garden) that should be it, you've sold it and that's the end of it, and if you think that it will be worth more in the future, you should factor that into the price when you sell it.


Tell me anything else that is sold with the clause if it gains value, and you sell it, you have to give the previous owner a cut ????


How about if I sold my prestige car on the condition that if it gains classic status and increases in value in the next 30yrs and is sold, I get a cut of the increase ? do you think anyone would buy it ????

AdrianC

Mgman1965 wrote: »

Personally I consider it greedy on the part of the seller wanting their cake and eating it.

So don't buy it.

Yes, it is that simple.

G_M

The only reason you are interested in this hypothetical property/land is because it has a potential future value which you can exploit.


Why should the seller not exploit it since he already owns it? Yes, he could build on it himself, or he could sell it to someone else willing to pay him and build on it themselves.


Having said that, if you want a clear answer to your question, quote the exact wording of the clause. Only then can we interpret it accurately!

MataNui

Or- the uplift clause could of been added just because the current owner is sick of seeing a-hole developers buying up anything with a large garden , running up the property prices just so they can be 'greedy' and wedge more houses into any space big enough to fit one.


Inn other words perhaps it was meant as more of a deterrent against further development than to gain profit.

moneyistooshorttomention

MataNui wrote: »

Or- the uplift clause could of been added just because the current owner is sick of seeing a-hole developers buying up anything with a large garden , running up the property prices just so they can be 'greedy' and wedge more houses into any space big enough to fit one.


Inn other words perhaps it was meant as more of a deterrent against further development than to gain profit.

Very true - and I'd certainly put an uplift clause on any property I was selling that merited it. Firstly - to stop development. Secondly - to make sure that, if I hadn't been able to word it in such a way to prevent it indefinitely (ie for more than 25 years) - that I got a share too.

OP isn't concerned about over-development and wants to take all the profit from this for themselves by the look of it.

getmore4less

Check the clauses carefully some will have holes in them that offer a development route.

Uplift clauses are factoring into the price but as a delayed charge that those that don't want to develop never pay.

By adding the land value all that happens is they restrict their pool of buyers.

FreeBear

Mgman1965 wrote: »

How about if I sold my prestige car on the condition that if it gains classic status and increases in value in the next 30yrs and is sold, I get a cut of the increase ? do you think anyone would buy it ????

Not an uncommon arrangement when buying & selling fine art.

Mgman1965

moneyistooshorttomention wrote: »

Very true - and I'd certainly put an uplift clause on any property I was selling that merited it. Firstly - to stop development. Secondly - to make sure that, if I hadn't been able to word it in such a way to prevent it indefinitely (ie for more than 25 years) - that I got a share too.

OP isn't concerned about over-development and wants to take all the profit from this for themselves by the look of it.

That is exactly where your wrong !!!!!!


I don't want to profit from development as you call it, I want to give my son and his OH a lift up on the property ladder and to live where they want to.


Bit hypocritical of you as well to state if you cant stop it you want your snout in the trough as well.