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Overage
What is "overage"? What are the constituent elements of an overage clause? What will trigger the payment? What will secure the payment? Peta Dollar answers these questions and more.
Revised June 2008
What is "overage"?
When land is sold, the vendor will normally do his best to sell at the best possible price - indeed, if the vendor is a public sector authority or a charity, he may be obliged to sell at the best possible price. Sometimes, however, the best possible price may only be available at some time in the future, or not at all. The most common example of this is where planning permission may be granted for a more valuable use of the land, but it is by no means certain that the permission will be forthcoming and, in any event, this is unlikely to happen for some time. Similarly, if land is sold for a particular purpose, such as for the development of 50 houses, and the developer in fact manages to build 60, then the land will obviously be more valuable with 60 houses on it rather than the original 50.
"Overage" is the term normally used, in the context of a property transaction, to mean a sum which the vendor may be entitled to receive after completion if a specified condition is satisfied; the condition may be:The grant of a new planning permission; or
The grant of planning permission for a new (perhaps more ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW
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