Overage clause

lesae

Just going through our property documents prior to signing the contract and have noticed that they have added an overage clause. It's a residential house that is doesn't have excess land to sell but does need updating inside when it comes to decor. 
We are not keen on this at all as I don't want the sellers to have any claim on our property if we were to sell it in 5 years. I can't see why they would add it apart from that the village is growing quite rapidly as is close to a popular area. 
Am I overthinking it? 

Brie

I thought this was mostly to avoid you profiting from flipping the property quickly rather than selling a few years down the line.  What does your solicitor suggest?

TadleyBaggie

Personally I would refuse to sign the contract unless the clause was removed.

Slinky

TadleyBaggie said:

Personally I would refuse to sign the contract unless the clause was removed.

So would I. Cheeky barstewards.

lesae

Brie said:

I thought this was mostly to avoid you profiting from flipping the property quickly rather than selling a few years down the line.  What does your solicitor suggest?

I've just raised it with her. I can't see any good reason for it apart from greed so I think we'll be refusing to sell with it on!

eddddy

It's a bit 'naughty' of the sellers not to have mentioned the overage clause early in the discussions.

Is it your sellers who are introducing the overage clause, or does it go back further - so it was already in place when your sellers bought the property?

If it's your sellers who are introducing it, you can say that you won't go ahead unless they remove it, if you want.


But if the overage clause was already in place when your sellers bought the property, it's very unlikely that they can remove it.

user1977

Has there been no mention of it up to now? Why hasn't your solicitor highlighted it (with flashing red lights and klaxons)?

SarahB16

eddddy said:

Is it your sellers who are introducing the overage clause, or does it go back further - so it was already in place when your sellers bought the property?    

This is what you need to find out.

The overage clause may have been put in place by the previous landowner (who the housing developer purchased the land from) and the overage clause may be in place for x number of years from the sale of the land.  

Edited to add:  It really does depend on what the overage clause says. Just because there is an overage clause in place is definitely not a reason to walk away from the house sale. Could you share the wording of the overage clause and we could then provide our opinions.  

BungalowBel

Wouldn't buy it unless it was removed.

artyboy

So they're selling it cheaper because they've let it get dilapidated, but want a share of the increase in value when you renovate it? 

Two words. First word: Foxtrot.

gm0

No not overthinking.

If it's an overage that has come "down the line" of prior title transfer they can readily prove that to your solicitor upon query.  Not assert.  Prove - with evidence.  

At which point the nature of the clause and the scenarios it bites for payment where - needs assessing vs your plans and when it lapses (timescale) to go away as inhibitor to resale. It's a late breaking showstopper. Or it's not.

But if it's just chancing their own arm for capture of post renovation value.  Then it's a hard pass.  

Tell them to take it out. Nice try. No cigar.  They want prime condition value. Do the project.  Then sell it.
Selling now at the agreed price. No future claim.  A simple message of no exchange with any clause like that in there.

To avoid miscommunication it does need to be correcty determined how this arose before manning the barricades