Property overage agreements, also known as uplift agreements, are becoming increasingly popular in the property development sector. These agreements are designed to ensure that developers are fairly compensated for any increase in the value of a property that arises following development.
So, what exactly is a property overage agreement? Put simply, it is an agreement between a landowner and a developer that stipulates that the developer will pay the landowner a percentage of any uplift in the value of the property above a certain threshold. This threshold is usually set by the landowner and represents the value of the property before development.
The purpose of a property overage agreement is to ensure that the landowner is fairly compensated for any increase in the value of their property that arises as a result of the development. This is particularly important in cases where the landowner may have been hesitant to sell the property outright, perhaps due to sentimental reasons or a desire to retain some involvement in the development process.
In order to ensure that a property overage agreement is fair and legally binding, it is important to enlist the help of an experienced property lawyer. The lawyer will be able to advise on the specific terms of the agreement, including the percentage of the uplift that will be paid to the landowner and the conditions under which the payment will be made.
It is also important to ensure that the property overage agreement is properly documented and registered with the Land Registry. This will help to avoid any disputes that may arise in the future and will provide clear evidence of the terms of the agreement.
Overall, property overage agreements can be a valuable tool for both landowners and developers. They help to ensure that all parties are fairly compensated for any increase in the value of the property and can help to create a more collaborative and mutually beneficial development process.
