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...

These clauses are relatively common in my experience, but I would certainly negotiate the term if you decide to proceed

Drop your offer by £50k due to said overage and tell them to otherwise stuff it

Fuckers

Sounds like you don't have any intention to develop the paddock - if not, accepting this clause could be a cheap way for you to get the land. I'm assuming the current price agreed isn't an amount that values the possibility of any future planning?

If it's on separate deeds, presumably when you come to sell the house you could keep the land separate/sell as standalone paddock, so no issues with selling main residence.

*Drop your offer by £50k due to said overage and tell them to otherwise stuff it

Fuckers*

The OP hadn’t said how much they are paying for the field, but that it was only “a couple of acres”. Id be surprised if they’re paying more than £20-£30k, so dropping their offer by £50k isn’t really going to work!

I’m another who will say overage agreements are very usual on land which is adjacent to dwellings or in an area likely to be earmarked in a local development plan. What is not usual- as others have said- is the late revelation of it and the length. Now if this were 35 acres of currently agricultural land that happened to be adjacent to a newly built but not complete council estate I’d expect 40 years. But a small parcel of agricultural land in a currently undeveloped rural village I would expect maximum of 25 years. It’s unlikely to affect the price of the land as unless you’ve bought it knowing the potential and have paid over the odds accordingly (ie pretty much anything over £10-12k/ac) then the land is still worth what it’s worth as agricultural or amenity land. Your suggestion of a shorter term is a good one and I would also possibly make the suggestion that the overage is only payable upon commencement of works, rather than simply upon obtaining planning. If your solicitor won’t help then engage a land agent- most rural estate agents will have one but clearly don’t choose the EA that the vendors are using (or any associated ones- we have many local EAs but they’re all part of only 3/4 actual firms). An overage of up to 25 years payable upon commencement of works which are residential in nature following successful change of use I would find acceptable, 40 years on any type of work which would uplift the value I would walk away.

I'd back out purely because you know you can't trust them to behave honourably. You'd be tied to these people who have shafted you and are after your money.

Most agricultural land nearby housing has overage clauses or a range of lengths. They are common - or land has one on although it expires in 16 years. It’s actually not as horrific as it sounds.

An overage is quite normal with a house with a larger garden or adjoining parcel of land - 40 yes seems a bit over the top though! It should also have been made clear in the marketing of the property.

It's up to you how you deal with this - I would also be fairly fuming.

I wouldn't agree with anything over 3 years... but I would walk away.. in all honesty. 🌺

Whilst overage clauses are common, I wouldn't say it's the norm or to be expected. We've never had one when buying property with land and have never viewed a property with one (South East). Currently buying 12 acres across 3 deeds and no overage clause. I wouldn't be happy buying if it had one.

I would worry about the resale, impact to valuation and that although you might not plan to move before 20 years, life happens and things change. I wouldn't want to feel trapped in anyway. They should have mentioned this at the start and it should have been in the estate agents details. I would be pulling out.

They are fairly common around here (non SE rural). We have one on our land that goes back 3 owners before us that expires in a few years time.

If they go for it, you do need to be really careful how it's worded and what exactly triggers the provision.

Like you, we didn't want to develop the land. But usually, it means land nearby is being bought for development which is why previous owners get greedy.

I think they are utterly ridiculous and should be outlawed personally!

Good luck with your negotiations!

What arseholes! Not fair but if you desperately want the house and don't think you'll build then consider the risk... maybe negotiate the amount down in case you do decide further down line to develop. And make sure if you want to sell further down line if this clause could cause an impact then...

I'd still go ahead - get them to reduce to 20 years. Looks like you have negotiate and ties in when you plan to move next. Yes they are being total dicks - but don't lose a house over it especially as the clause doesn't impact you as you plan to live and use the land as it for 20 years.

In your shoes I'd be prepared to walk away. They sound incredibly greedy.

You're at the advantage that they have your offer on the table now. Should you walk away is it likely they would receive a similar or higher offer now they have the overage demands in place? Or would their specific demands reduce the overall value of the property going forward.

Additionally they can't guarantee how the housing market is going to go. I've heard varying reports for what's coming in the new year and whilst I don't think it can accurately be predicted, I would t be surprised if the housing market crashes post Brexit and because of Covid.

Unlikely now there’s a deal prices would drop
The markets opened yesterday and shot up which indicates confidence again in U.K.

COVID might have more effect temporarily though

Thank you everyone, honestly this has really helped me to rationalise my thoughts.

We’ve replied to request that the overage only applies to residential planning and for 10 years.

Having slept (well not slept much in the last week and with a 2 month old baby to boot!) we still really want to live there but we are also not prepared to give in without at least some movement on their behalf. We would accept 20-25 years and walk away from anything more.

As pps have deduced the land is costing around £10k per acre. We could leave this invested in the land, if we were to sell, mostly just to ensure that the greedy sods never see an extra penny. I’m also of a mind to apply for planning the day after it expires (but if it’s anything over 15years it’s likely they will be dead)

They have threatened that should we not agree by next Monday they will be re-advertising the house at nearly 10% more than our accepted offer. Having looked at the local market there seems to be very little in this price range, so maybe they will find a buyer, maybe not. I do think they might have a problem with a mortgage valuation if that were the case. I have told the EA in no uncertain terms that I do not appreciate them threatening us.

I really wish they would just see and understand that a little give on their side and they’ll have the money in their account by the end of the month 😫

I have also speculated that the housing market could see a dip in the next 6-12 months, hopefully for us this would mitigate missing out on the SDLT holiday (which honestly was the main driving force behind the timing of this sale and purchase (whilst heavily pregnant 🤦🏻‍♀️))

Anyway, we’re spending today packing as by the end of the month we will either have this sorted and be on our way to the midlands or off to Wales to regroup.

@Onedropbeat

Unlikely now there’s a deal prices would drop The markets opened yesterday and shot up which indicates confidence again in U.K.

COVID might have more effect temporarily though

The industry is predicting falls next year when the Stamp Duty and furlough buffers end.

There are some papers saying drips some saying rises

You have to look behind who’s writing them to see what their reasons are behind the reports

Generally there will still be a housing shortage

Seriously - I would pull out. I hate to think if you had to sell for any reason within the 20 years you plan on living in this house that this proviso would prevent your move.

They are greedy CFs.

On the basis if 40 years I’d pull out.

20/25 years would still be way too long IMO, and selling the property only without the land would likely disadvantage you financially.

There will be other properties.

Seriously - I would pull out. I hate to think if you had to sell for any reason within the 20 years you plan on living in this house that this proviso would prevent your move

Honestly that is such a daft thing to say - the overage only affects the field, which is a separate purchase to the house. They are two different transactions, with two different sets of deeds; the field, the house. The OP could sell the house if they wanted to - with or without the field. The overage on the field has no bearing on the house at all.

When someone behaves so dishonestly as to throw a significant spanner in the works so late in the day can you ever trust them? Had they made their terms clear at the onset that would have been "just business" but there is a difference between doing business and extortion.

Im glad you went back with a counter offer OP. It shows them you mean not to be bullied and are prepared to walk away in the light of their greed and dishonesty. If you have to lose the house think about how it would have felt to have this sword of damocles hanging over you.

Do not accept anything other than 10 years max. Anything more will be an absolute bind for you