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    • mary
    • By mary 17th Mar 17, 11:32 AM
    • 1,568Posts
    • 447Thanks
    Overage clause
    • #1
    • 17th Mar 17, 11:32 AM
    Overage clause 17th Mar 17 at 11:32 AM
    An overage clause has been triggered by Planning Permission for change of use on part of a property from horticultural to commercial use.

    My question is, am I entitled (as a beneficiary) to a proportion of the increase in value of the land (from horticultural to commercial) only?


    Am I entitled to a proportion of the new business being developed by the new owners of the property as well?
Page 2
    • mary
    • By mary 18th Mar 17, 11:50 PM
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    • 447 Thanks
    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.
    Originally posted by Hoploz
    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.
    • mary
    • By mary 19th Mar 17, 12:06 AM
    • 1,568 Posts
    • 447 Thanks
    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.
    Originally posted by D_M_E
    In the accompanying documentation to their 2nd Planning Application there is a photo of the containers with a couple of trolleys of plants for sale (rather like those you see outside B&Q). It looks very much like bought-in plants, rather than grown on the original nursery, because as I said before they have demolished the original greenhouses and there are no new ones.

    Again on the original documentation there is a spread sheet listing the current people who started using the containers and that ties in with a couple of months after their 1st Planning Permission was granted. The site plan basically leaves room for access to storage containers and no growing room for plants when you look at the dimensions involved.

    So the overage clause would have been triggered, as far as I can tell at the time of the 1st Permission being given.

    There are no other terms in the overage clause, the page I typed out is the whole thing, nothing more. So if they were awkward they could just say we have to wait until they sell the land, which as they are young may well not be for years.

    As you said under 2.2 payment should have been sorted. The new owners told us nothing about container storage and it was only as a result of them telling us about their wish to lease the land to a battery storage company and possible payment to us due from an uplift clause, that I then started investigating with the local Planning Authorities and unearthed the fact that they had already got 2 Planning Permissions approved and had kept that quiet. I don't live near there, so there's no way I would have known.

    I have been told by one Valuation company that a Valuation report will cost about 2,000. I am looking to get another quote on Monday. I don't know how much a Solicitor would end up costing and if the new owners decided to be awkward and not pay up and we had to take them to court, I have no idea how much that would cost. I have drafted a letter (which I am asking the other beneficiary to check over) to the solicitor we visited and if all is well ask the solicitor to send the owners a letter in the first instance asking for payment from these two Trigger Events and see what happens.

    Thank you all for your suggestions and help.
    Last edited by mary; 19-03-2017 at 12:15 AM.
    • Hoploz
    • By Hoploz 19th Mar 17, 8:02 AM
    • 3,693 Posts
    • 3,231 Thanks
    This is an interesting read. Thank you for posting your situation. It's interesting to hear from the other point of view, as mostly questions on here are when people are buying and come across these covenants.

    Good luck, it sounds like it's going to be pretty expensive to get to the bottom of what is owing, but could be worthwhile doing so.
    • EimearMurphy
    • By EimearMurphy 13th Sep 17, 12:00 PM
    • 1 Posts
    • 0 Thanks
    So how does this work if your planning consultant says they want 40% of the upturn in the market value of properties. And I mean properties, not just 40% of the upturn in land value.
    • eddddy
    • By eddddy 13th Sep 17, 2:30 PM
    • 6,625 Posts
    • 6,496 Thanks
    So how does this work if your planning consultant says they want 40% of the upturn in the market value of properties. And I mean properties, not just 40% of the upturn in land value.
    Originally posted by EimearMurphy
    The same way I guess. You get the properties valued without planning consent, and with planning consent. You have to pay 40% of the difference.

    As you have a planning consultant, it may be better to ask them.
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