Property with significant land, subject to overage clause

The challenge

We were approached by the would-be buyer of a house in the countryside with a sizeable plot of land attached to it. The seller wanted to impose an overage clause, which would obligate the buyer to pay a specified amount of additional money in the future, if they decided to gain planning permission and develop it. The buyer was struggling to find a lender that would accept the overage clause, because of the uncertainty this created over the property’s current and potential value.

We did

Because we deal in quality not quantity, we were able to take the time required to really explore the ins and outs of this application and the property concerned, alongside the buyer, their surveyors and solicitor. Together, we were able to reach an agreement that worked for us all – the buyer was comfortable with the price they were paying for the property now, the potential additional amount that could fall due in the future and how long that overage clause would stay in place for.

The result

The buyer was able to secure their dream home and we, as lender, were comfortable that our security in the property was adequately protected.