View source for Land-sale overage

{{more citations needed|date=March 2021}}

'''Overage''' or '''land-sale overage''' (also called “claw back”) is a term in [[land sales]] used to describe a sum of money in addition to the original sale price which a seller of land may be entitled to receive following completion if and when the buyer complies with agreed conditions.

Overage is often written into a [[contract of sale]] where land or property is being sold at an undervalued rate, or there is a clear process which can be undertaken to improve the value of the land over and above the cost of the process to improve the value. Obtaining [[planning permission]] is often an example of a process which can significantly enhance the value of land over and above the cost of gaining the permission,<ref name="def">{{cite web |last1=Jinks |first1=Martin |title=What Is An Overage Clause? l Commercial Property Blog l Nelsons |url=https://www.nelsonslaw.co.uk/overage-clause/ |website=Nelsons |access-date=8 March 2021 |date=31 July 2019}}</ref> and the overage provision may state a percentage of the resultant land value increase which is due to the vendor.

Overage does not solely relate to land and property and could be written into any contract for a sale of goods. Therefore, if an old [[classic car]] in poor condition was to be sold to someone with the intent of refurbishing it and then selling it on, the original seller may choose to sell the car at a very low value and contract to receive a percentage of the uplift from the next sale as well.

In the [[England and Wales Court of Appeal|England and Wales Court of Appeal (Civil Division)]], the 2008 case of ''Micro Design Group Ltd & Anor v BDW Trading Ltd.'' raised issues of whether an overage payment was due after planning permission had been obtained by the [[Sales|seller]] rather than the buyer.<ref>England and Wales Court of Appeal (Civil Division), [https://www.bailii.org/ew/cases/EWCA/Civ/2008/448.html Micro Design Group Ltd & Anor v BDW Trading Ltd.], EWCA Civ 448 (21 April 2008), accessed 23 March 2021</ref>

Lawyer Alexandra Lethbridge notes that in other UK cases, the [[case law]] on overage is "developing fast". Examples referred to include:
*exposure of [[solicitor]]s to claims of negligence for failing to include sufficient security for overage obligations in sales contracts
*use of novel remedies by the courts in order to secure justice
*the use of worked examples to follow through on the legal consequences of drafted forms of wording
*clear reference in agreements to duties of [[Disclosure (law)|disclosure]] and [[good faith]].<ref>Lethbridge, A., "Finger on the Trigger", ''Estates Gazette'', 22 March 2008</ref>

==References==
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[[Category:Real estate]]