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Overage clause
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martinsurrey wrote: »ouch,
they don't need to pay the overage until they dispose of it, without any increase for inflation...
you could be waiting 30 years until they die!
That was my next question - I wasn't 100% clear as to the meaning.
Well the overage bit runs out in about 5/6 years time. In a hypothetical case, they stayed there for another 30 years, and on the assumption that the grant of Planning Permission now has been triggered, does this mean that they would still be liable to pay the Trigger money and we'd just have to wait 24/25 years to get it?0 -
That was my next question - I wasn't 100% clear as to the meaning.
Well the overage bit runs out in about 5/6 years time. In a hypothetical case, they stayed there for another 30 years, and on the assumption that the grant of Planning Permission now has been triggered, does this mean that they would still be liable to pay the Trigger money and we'd just have to wait 24/25 years to get it?
Yes. Once triggered, its owed, they can just defer payment, not get out of payment.0 -
Unknown to us until very recently, we have discovered the new owners got planning permission in 2015 for the 24 shipping containers on site and in 2016 there was a second Planning Permission granted to increase the number up to 40.
posted by mary
Planning permission granted in 2015 means your entitlement would be 40%, provided the containers are not used for horticultural purposes.
Also, you should explore whether the original containers were being used for such purposes too - that number of containers on a small plot suggests a substantial change of use and as such could have triggered the clause years earlier.0 -
Planning permission granted in 2015 means your entitlement would be 40%, provided the containers are not used for horticultural purposes.
Also, you should explore whether the original containers were being used for such purposes too - that number of containers on a small plot suggests a substantial change of use and as such could have triggered the clause years earlier.
Thanks for that observation, that the earlier permission would be 40%. In support of their 2nd Planning Application for 40 containers, they included a spreadsheet with names of current users of the containers - it seemed to be largely domestic use and also surplus stock from small local retail outlets. I don't think in any way they were used for horticultural purposes - plants would die enclosed!!!0 -
Thanks for that observation, that the earlier permission would be 40%. In support of their 2nd Planning Application for 40 containers, they included a spreadsheet with names of current users of the containers - it seemed to be largely domestic use and also surplus stock from small local retail outlets. I don't think in any way they were used for horticultural purposes - plants would die enclosed!!!
So they are, and have been for some time, in breach of clause 2.1 - the above quote gives you the evidence for the breach.
You should check when the containers first appeared as that is what would have triggered the overage clause with or without planning permission and therefore your entitlement could be a lot more as a result.
I wonder if their breach negates clause 4 - the bit about a lifetime to pay up - you need to consult a solicitor specializing in enforcing covenants.0 -
It refers to the increase in value of the particular section of land which is changing use. Some is already commercial. So iit might not be worth a huge amount more? It's going to be tricky to calculate, I think.0
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It refers to the increase in value of the particular section of land which is changing use. Some is already commercial. So it might not be worth a huge amount more? It's going to be tricky to calculate, I think.
I did manage to get a guestimate from a Chartered Surveyor/Valuer - horticultural use is about £20,000 per acre and commercial use is £200,000 in the area.
The land previously was previously considered horticultural as that is where plants were grown and sold in the local market.
We have crudely estimated that the site is about .8 of an acre0 -
But surely that difference in value is applicable where there is an individual site. Is the land in question one part of a whole site? By which I suppose I mean could it actually be sold independently for commercial use in future?
Anyway, sorry, bit off topic as that isn't what you were asking about.0 -
20 containers on a site of about .8 acre sounds like a major change of use from horticultural to commercial.
There probably would not be much, if any, horticultural operations being undertaken given that access to each of the existing 20 containers used for storage would be required - this would be another point indicating the .8 acre is, and has been for some time, commercial and no longer horticultural.
Means that the overage clause would have been triggered long before the application for the extra 40 containers.
Also you say they are in negotiation to grant, or have already granted, a lease to a separate company for further commercial expansion.
You need to see a solicitor with a view to getting the clause enforced and, as has been said, get the land surveyed and valued as commercial and work from there.
You are possibly looking at a share of around £100,000 or more, given the figures you already quote above - you really need to see a solicitor.
Also, there may well be other terms in the overage clause which would mean not having to wait a lifetime for payment.
See a solicitor.
EDIT - under clause 2.2 if there was in existence planning permission for the original 20 containers, then that means that payment should have been sorted and agreed when that was granted.0 -
The land in question is one part of a whole site. It could be sold independently for commercial use in future. They demolished the existing greenhouses and nothing is being grown in that same location. The remaining land to the one side could still be used for growing veg etc. & the existing fruit trees are still there but there is no sign of new planting, it is all given over to grass.But surely that difference in value is applicable where there is an individual site. Is the land in question one part of a whole site? By which I suppose I mean could it actually be sold independently for commercial use in future?
Anyway, sorry, bit off topic as that isn't what you were asking about.0
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