Overages - percentages

oz0707

When overages are negotiated or attached to a sale what are the maximum percentages you ever see? I commonly see say a 50% overage on increase in value for 25 years, for example if further development. Do you ever see them for 75% or 100%?

Am I right in thinking they basically work as follows. They apply to the increase in value of the land as a result of, say, obtaining planning for further development. So not the total gross value of any future development but just the increase in value of the land with the permission. Is any allowance made for inflation in property prices between the time of overage coming into effect and the date the land increases in value?

Thanks

user1977

Lots of different permutations in how they work, they could bring the ultimate value of the development into it. Best to get specialist advice if you're going to try negotiating this sort of thing.

Obviously it partly depends whether the future development is at all likely to happen, or if you're agreeing to it as a buyer just because the seller wants to cover off the remote possibility of you making a big profit.