We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Overage Provision on residential property - general query.
Reds-on-Sea
Posts: 428 Forumite
Hiya,
my OH & I are hoping to complete our purchase of 3 bed semi on May the 9th. We've just been informed that there is something called an "Overage Provision" applied to the house we're buying. I'd never heard of it, and here's a link explaining it.
http://www.tltsolicitors.com/legal-update/Property-Update/P4776.asp
Basically, it means that there's is a restriction placed by the seller, on any extensions/developments we make (for the next 80 years!) that require planning permission. If we were to build an extension at the rear (we hate extensions and would never build one anyways) but if we did, and it added, for example, £20,000 to the value of the house, then if we ever sold the house, we are obliged to pay the people/company we're buying it from, 50% of any uplift in value created by the said extension - in other words we'd have to pay them £10,000 for the extension WE build and got approved and paid for. It's a freehold property btw, so not to do with the lease. The percentages are variable from what I gather, but in our case is 50%
This just sounds extraordinary to me! Has anyone else ever encountered this, or been caught out by it? I happen to know that a similar overage provision applies to several houses on our (soon to be) street. The house next door have (thankfully) just had a HUGE extension denied. I wonder if they were aware of the Overage Provision on their house and whether they still would've gone ahead with the large extension having known about it, seeing that they'd have to give away half their profit on selling thier house.[/font]
What do you guys think? I've just checked whether making a driveway down our street required PP, luckily it doesn't as that's the one thing we would want to do....
my OH & I are hoping to complete our purchase of 3 bed semi on May the 9th. We've just been informed that there is something called an "Overage Provision" applied to the house we're buying. I'd never heard of it, and here's a link explaining it.
http://www.tltsolicitors.com/legal-update/Property-Update/P4776.asp
Basically, it means that there's is a restriction placed by the seller, on any extensions/developments we make (for the next 80 years!) that require planning permission. If we were to build an extension at the rear (we hate extensions and would never build one anyways) but if we did, and it added, for example, £20,000 to the value of the house, then if we ever sold the house, we are obliged to pay the people/company we're buying it from, 50% of any uplift in value created by the said extension - in other words we'd have to pay them £10,000 for the extension WE build and got approved and paid for. It's a freehold property btw, so not to do with the lease. The percentages are variable from what I gather, but in our case is 50%
This just sounds extraordinary to me! Has anyone else ever encountered this, or been caught out by it? I happen to know that a similar overage provision applies to several houses on our (soon to be) street. The house next door have (thankfully) just had a HUGE extension denied. I wonder if they were aware of the Overage Provision on their house and whether they still would've gone ahead with the large extension having known about it, seeing that they'd have to give away half their profit on selling thier house.[/font]
What do you guys think? I've just checked whether making a driveway down our street required PP, luckily it doesn't as that's the one thing we would want to do....
0
Comments
-
It's not uncommon where property has development potential, but the current owner can't be !!!!!d to get the relevant permission.
Either accept it, negotiate it or walk away.Warning ..... I'm a peri-menopausal axe-wielding maniac
0 -
I accept it totally, I don't want an extension, it'd be highly unlikely to get approved anyways due to the houses being of a certain style. I can understand it if it's on a chunk of land that would have development potential, but this is just a semi-detached house in a residential area by the sea. The houses are only 50 years old, no chance of them being knocked down/rebuilt for a LONG time yet. There's a large garden, but certainly not anywhere to develop on a large scale. If anything, you might build a conservatory or something similar, but even something as small as that means I'll have to pay them money when I move out - even if it's 50 years time! It's ridiculous! I just find it surprising that they have been bothered to arrange such a provision. It'd be nice if, upon selling the house it would then pass to me? lol. I'd love to get free money if the people I sell to decide to extend!
Main concern is value (mortgage valuation 2mo) and resale value. It might put people off. I've had to inform the mortgage company as it affects their valuation
ho hum...0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.3K Banking & Borrowing
- 254.4K Reduce Debt & Boost Income
- 455.4K Spending & Discounts
- 247.2K Work, Benefits & Business
- 603.9K Mortgages, Homes & Bills
- 178.4K Life & Family
- 261.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards