Feeling bullied, should we pull out?

[DobbieFreeElf]

I’ve come here to get some opinions from people removed from the situation.

We had an offer accepted on a house in September, the house fits our, very specific, needs and although we would like to improve it over the years (new kitchen, bathrooms, maybe extension) we would be planning this to be a home for 20 years.

The house is an adjoining paddock, a couple of acres, which is ideal as I have always had horses (prior to kids) and when the little people are bigger I would like to get another.

We were all set to exchange on the Monday before Xmas when our solicitor calls to say that the sellers want to impose an Overage clause (also called uplift/ clawback) on the land. In essence this means that if planning permission is granted on the land we must pay a percentage of the increase in value to the sellers. We felt completely blindsided as we had never even heard of this before that date.

Aside from potentially building a couple of stables in the future we have absolutely no plans to develop the land. (Why would we, we love the house because it is rural).

I can’t decide if we should cut our losses and walk away now.

Now the seller is threatening to put the house back on the market next Monday. We feel backed into a corner and bullied.

Initially we were dead set against the overage (especially as it was dropped on us at the 11th hour) but having had time to look around at what else is on the market (nothing that meets our needs), thinking about the 15k extra we will have to pay on another property (as it’s doubtful there would be a house we would complete on before the SD holiday ends), the £2k+ we’ve already spent on conveyancing, searches, surveys, inspections etc. and many other factors we had decided that we would be open to the overage (as long as we negotiate terms that we are ok with)

Are we stupid, should we walk away, is this fate giving a massive warning sign...

I agree that’s they’ve decided they marketed the house too low and want to claw back money.

Out of interest was the house new to the market when you put on the offer?

I can remember eight year ago we viewed two chalet bungalows a couple of houses away from each other. I was really confused as to why one was so much more expensive than the other and asked the agent. Apparently one had sold pretty much immediately it went into the market, asking price. The women let the sale get to a certain point then convinced herself she’d let the house go at too low a price so pulled the sale. Then remarketed it at around £15,000 more.

And there the house sat for months and months. I don’t know what she ended up getting for it as we bought in another county in the end but I’d bet she lost money in the end.

We have a 3 acre field next to our property which we have tried to buy on several occasions. Agricultural land is worth about £10-12k per acre here, but when we had it valued the advice was that it was worth double that because of the 'marriage value' of the land. We offered double the value and it was turned down. It's owned by a developer who hopes to develop it, despite it being a rural area, AONB, Green Belt, Area of Great Landscape Value and within 400m of a Special Protection Area (presumption against residential development). We also have a covenant that could apply. Despite that they won't sell and unfortunately all of these things can be overturned, so maybe one day they will be successful.

So unless you have a choice of properties with adjoining paddocks, then it's worth considering a compromise with them if you can.

Agree they are behaving unreasonably, but they are possibly not sure they want to move, and therefore will hold out, or just stay longer.

At the end of the day, can you buy a similar property for a similar price?

An overage clause on the sale of land is very very common so in principle I would have no objection to an overage clause being included.

However it all depends on the percentage of uplift and for how long the overage clause is in place. On uplift it ranges from a low of 30% to a high of say 70% (if you are talking about land say near to Salcombe or with a cracking view). The tenure would typically range between 10 and 20 years (again 20 years for the more desirable location). So 40 years is taking the piss.

Personally I would agree the overage clause in principle but for 10 years on a 50% uplift but the clause terminating in the event you sell a a later date to a 3rd Party.

Alternatively look to buy the house without the land if they are on different land registry titles.

Ok so where you are at is that they are refusing to proceed unless you either agree to the 40 years or pay an extra £35k?

Is that right?

The fact is that the overage is "normal" though the duration they are asking for is not (plus the timing of the demand) and it's especially odd given the age of the vendors and the likelihood of them ever benefitting from it.

If I had to put forward a theory it would be that children of the vendors have "got involved" after the parents have told them they were about to sell. They want the 40 years but the parents would take the money now - that would explain their position.

One possible offer to put forward is to say if they reduce the overage by 50% to 20 years then you (assuming you can afford to) will pay 50% of the "extra" so increase the offer by £17.5k.

Is that a possibility to consider?

They have behaved really badly springing this on you at the last minute. As if they 'forgot' until just before exchange. The fact that they are holding a gun to your head and threatening to re-market the house makes them appear doubly unreasonable/ untrustworthy.

40 years is a very long time and they don't seem willing to compromise on this at all.

I think you should walk. There will be another house.

I think you should walk

If you do go ahead I’d want to exchange and complete on the same day so they have no time to throw anything else in the mix

@Bleughbleughbleugh12

If you do go ahead I’d want to exchange and complete on the same day so they have no time to throw anything else in the mix

I wouldn't - I would want to exchange asap before they dreamt up something else.

Once they have exchanged contracts it is binding.

@RainingBatsAndFrogs ah ok I didn’t realise that was the case, I thought they could still pull out or spring something else on them between exchange and completion?

@RainingBatsAndFrogs
Nope.
They could pull out but they'd be in breach of contract and it would be very expensive.

How you doing OP.. did you get any sound advice from your friends

To take the emotion out of it, would you have been interested if it had been $35K higher / with the clause at the beginning?

I know you don’t like the stunt they pulled, but walking away is not necessarily the answer. This is a negotiation.
From what I can gather, this clause only applies to the paddock and not the house, and it sounds like you’d have no issues with selling the house in the future, just possibly the paddock. So maybe view them separately for the purpose of value and negotiation.
So if all you want to do is put a stable block on it, and that isn’t included in the clause, then I don’t see any issue, other than perhaps asking them to cover the extra legal cost.
The extra £35k doesn’t sound like a bad offer to negate the clause, when you consider the uplift in value of you were ever to get residential planning permission. You have to bear in mind what it could be worth.
To me, it appears what they are doing is creating the potential for future weather for their children...... no more than any other mumsnetter might do.
So if you get planning on the stable block, and can do whatever you like with the house at no extra financial cost, other than the extra legal fees, I don’t see a problem.
Maybe visit the vendor directly, have a cup of tea with them. You’ll probably find that you are all reasonable people.
Good luck, and I hope that whichever decision you make feels right retrospectively.

Hi everyone! We’ve been drowning in a sea of boxes but there is light at the end of the packing tunnel!

Most of the advice we’ve received is that it was pretty poor form of the solicitor to just leave us to deal with it (obviously we know he’s been on his Merry festive holiday!). Again, anyone I’ve spoken with who deals with overage often has found 40 years to be laughable. I’ll speak with our solicitor when his feet hit the ground and see if it’s worth asking him to suggest a shorter term would be more reasonable.

In the meantime we did message the agent to ask her to reassure us that the house wouldn’t be relisted until we have had enough time to consult with our solicitor to understand the legal implications of their clause wording in full...

So really a case of watch this space. We should know where we stand by the end of the week (I hope)!

I hope you get some certainty on this very soon as it’s so annoying being in limbo!

So they didn't go ahead and relist today as threatened?

I really hope you pull out.

They are calling your bluff. They don't think anyone would agree to this 40 year deal. They'd always expect someone to take the offer of paying an extra 35k. This way it'll help in their retirement.
I'd play hard ball and say no, pull out and see what really happens.

There is always another house op.
And you don't want to buy this one letting their terms and then moving in and thinking "we paid too much for this" it will leave a sour taste every minute you are there.

@DobbieFreeElf
Have you been able to pin down your solicitor and have they given and advise going forward?

Well done on playing hard ball

I hope you're getting good advice from your Solicitor OP

How are you getting on OP , hopefully some good news.

Very tricky. So here goes. My initial reaction is to tell them to get stuffed.

However, set aside pride and principals then do what you think is right for you.

One thing is that such a covenant lowers the value and the long term value. It ‘feels a different deal’....and really it’s the whole 40 year thing. It almost makes the place feel like someone else has rights over you.

10/15 years is much more realistic. Ask the agent or another agent....surely a 40 year covenant like that needs reflecting in the price.

Now is the bigger issue. Prices a likely to drop this year (but who knows)....if they try to sell without the paddock or a covenant on the paddock they may struggle to get their price and if sentiment changes downwards then they are stuck.

Me, I would set aside pride, principals and put a business head on and do a deal that suits you. For me, that might mean walking away...for you that might mean buying it.

All I would say is 40 years will impact on any resale.

Hello everyone! Again I’m so grateful to all of you taking time to give me your advice from every perspective. We completed our sale yesterday and we have moved in with my parents in law as Tuesday’s announcement meant that the office I had arranged in wales had closed and the internet speed at the cottage is far too slow to keep the business up and running. Once we had settled here yesterday lunchtime we had time to chat about our next move. We decided that on balance the house was ideal but that an overage would cause issues and bad feelings going forward. Therefore, after speaking with a local land agent, we decided to offer half the additional amount to move forward with the purchase without the overage. This was accepted. According to the land agent this isn’t above what he would expect to pay for land in the area so we don’t feel like we’ve been completely fleeced. Furthermore, we’ll still be completing before the 31/3. Added to the fact that we have already done all the legal work, searches, surveys & inspections, none of which threw up anything that we would immediately have to put money into. Sadly the additional cost will delay us installing a new kitchen but I can live with that!

Although we felt that the whole situation was very unfair, overall this seemed to be the best solution for us going forward as we expect to be there for a very long time but want to ensure that if circumstances were to change we wouldn’t have a potential problem on our hands.

Because we have everything else in place we should exchange early next week with completion at the end of the month 😊