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Original poster

Feeling bullied, should we pull out?

300 replies

DobbieFreeElf · 29/12/2020 14:52

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...

OP posts:
Aida11 · 30/12/2020 12:50

I would pull out purely just because it has been imposed at the 11th hour. It seems ridiculous if they didn’t make you aware of it before hand even if you have no intention to develop it. What if you sell it on? Whilst there is a mad rush to beat the stamp duty cut ( both buyers and sellers) , they are also at risk of not getting an offer that matches yours.

Tamingofthehamster · 30/12/2020 13:49

Maybe they’re doing it to prevent their land from being built on.

inquietant · 30/12/2020 13:54

It isn't their land if they sell it. If they want control they should keep hold of it.

Tamingofthehamster · 30/12/2020 14:09

I agree it won’t still be their land, but they may still not want to sell it for development if they have an emotional attachment to it

inquietant · 30/12/2020 14:16

That would be ridiculous tbh, if they don't want to relinquish control they shouldn't sell it.

MatildaonaWaltzer · 30/12/2020 14:33

@Tamingofthehamster that’s a charmingly naive view; if it was sentimental they could lease it to op rather than sell it. This is a purely commercial mechanism to have a second bite of the cherry

ClarasZoo · 30/12/2020 14:43

Sounds reasonable of your sellers to
me. If you develop they get a cut. Or offer £10,000 more now.... and they might drop it...

mellicauli · 30/12/2020 14:52

Out of interest, what happens if there is a decrease in the value of the land? Would the owners be expected to make good a % of the losses when you sell it? Or do they only take the upside, not the down?

ChateauMargaux · 30/12/2020 15:02

Also remember that other offers are also based on the assumption that they will be buying the property as it is... the other buyers are likely to be as taken by surprise as you are about this.

BlueThistles · 30/12/2020 15:03

@ChateauMargaux

Also remember that other offers are also based on the assumption that they will be buying the property as it is... the other buyers are likely to be as taken by surprise as you are about this.

absolutely... 🌺

GLTM · 30/12/2020 15:12

It could affect resell of the house. Good luck.

longtompot · 30/12/2020 15:49

Can you just buy the house, or is the land needed?

strawberry2017 · 30/12/2020 15:56

I wouldn't want to buy a property where the previous owners had any sort of hold over me. It's completely inappropriate.
If they put it on the market again they will likely miss the stamp duty window and may find that people don't agree the higher price because of the additional costs.
I would say we exchange at the previously agreed deal or you back out.

IndecentFeminist · 30/12/2020 16:19

They don't have any form of hold or say in what the new owners do with the property. It only means that if the value of the land increases because they get planning permission on it then they get a percentage of that increase.

It is quite common, and not something that would concern me especially if I had no plans whatsoever to apply for planning.

4amwakeup · 30/12/2020 16:59

OP I work in this field (lol) and you have it pretty much spot on in my view.

It won’t decrease the value of the land for reasons PPs have given, and 20 / 25 years is the top end I would go in duration.

As a PP said it should be triggered by implementation (ie works starting) to avoid third party planning permissions triggering the liability but if your sellers are difficult
and this is the only sticking point you could accept planning permissions obtained by you or on your behalf.

I’d also suggest that they get their percentage of the increase in value after deducting the cost of obtaining the permission (so 25% of (increase - costs)) otherwise in real terms they are getting more than 25%.

Overage agreements are complicated to negotiate and draft and while I think your solicitor could have given you more help with this, that would potentially cost you more in legal fees than the £1k quoted. I’d help my clients with the negotiation, but I charge a lot more.

Pancakeorcrepe · 30/12/2020 18:25

You seem to have received lots of good advice already, just wanted to add, what a rotten move of the vendors! To spring such a thing last minute. Ridiculous! Wishing you the best of luck.

boonboon · 30/12/2020 20:51

Could be a money making scheme for them. If it's value of land if planning permission is granted.

Once you've exchanged the sellers can apply for planning permission on the land. If it goes through are you liable to pay even if it wasn't you making the application?

www.doineedplanningpermission.co.uk/forums/planning/obtaining-planning-permission-on-someone-elses-lan/#:~:text=%22Interestingly%2C%20you%20do%20not%20have,to%20make%20a%20planning%20application.&text=Permission%20relates%20to%20the%20land,therefore%20anyone%20could%20implement%20it.

Tiffbiff · 30/12/2020 21:21

Fingers crossed on a positive outcome OP

Daisydoesnt · 31/12/2020 10:15

*Could be a money making scheme for them. If it's value of land if planning permission is granted.

Once you've exchanged the sellers can apply for planning permission on the land. If it goes through are you liable to pay even if it wasn't you making the application?*

Any solicitor would be seriously, SERIOUSLY negligent if they allowed their client to sign a covenant under those terms!

You do also have to look at this from the vendors' perspective. They are selling the field for £20k to the OP. The OP could - the day after the purchase goes through - apply for planning permission, and flip the field by selling to a developer. A 2 acre field with planning is worth, what? I don't know where this house is but round here it could be worth easily £400k-500k if its planning for one large house, or twice that if it was for more high density.

custardbear · 31/12/2020 10:22

If they're expecting a cut of extra profits after they've sold it then surely you pay less per acre of the land you're buying as they've still got a Potential investment

Brillig · 31/12/2020 10:53

I also think they are CFs of a high order, OP - regardless of whether this is a common arrangement or not, for not springing this on you until the last minute, and for threatening that the property will be re-advertised at a higher price if you don’t give in to their bullying.

FWIW, my sibling and I are in the unhappy position of having just inherited a property from our beloved late parent. When we had it valued for probate a couple of months ago, estate agents stressed that if we intended selling (we don’t but couldn’t have done at that point because...probate) it would need to go on the market right then in order to even be in with a slim chance of squeezing into the lower stamp-duty window. Frankly this talk of putting ‘your’ house back on with £££ on top sounds like so much hot air to me.

optimisticpessimist01 · 31/12/2020 11:20

OP you've already increased your "absolute maximum" you would go to from 15 years to 25 years. You're thinking too emotionally about the house, if you intend to move after 20 years then do not go over these terms.

Newyearnewrule · 31/12/2020 11:53

I don’t think they are bullying you. They might think you are bullying them. It’s their property and they can choose to sell it to you at whatever value and terms they choose. You are always free to walk away. If they think they will get what they want if they go back on the market then that’s up to them.

You are under no obligation to agree with their terms. Decide what you are willing to pay and the terms you will agree to. Someone else may be willing to pay more or agree to the terms of the seller. To them it is worth more but to you it is worth less than they are expecting. They don’t want to feel cheated and you don’t want to feel cheated. They want to get the max and you want to get a bargain. No one is doing anything wrong here. Don’t tie too much emotion into it. See it as you would a normal business transaction.

Be prepared to walk away if you don’t think you are getting a good deal out of this.

Clymene · 31/12/2020 11:58

@Newyearnewrule

I don’t think they are bullying you. They might think you are bullying them. It’s their property and they can choose to sell it to you at whatever value and terms they choose. You are always free to walk away. If they think they will get what they want if they go back on the market then that’s up to them.

You are under no obligation to agree with their terms. Decide what you are willing to pay and the terms you will agree to. Someone else may be willing to pay more or agree to the terms of the seller. To them it is worth more but to you it is worth less than they are expecting. They don’t want to feel cheated and you don’t want to feel cheated. They want to get the max and you want to get a bargain. No one is doing anything wrong here. Don’t tie too much emotion into it. See it as you would a normal business transaction.

Be prepared to walk away if you don’t think you are getting a good deal out of this.

Did you miss the bit where they had Sstc In September and decided to add in the overage clause just before exchange?

That's the bullying bit. It's like queuing for ages for something and then being told that the price has gone up/the bogof offer you were queuing for has now been changed.

Newyearnewrule · 31/12/2020 12:15

We may have different views on what bullying means. They changed their minds because they feel they are shortchanging themselves and revised the terms. What is wrong with that? If I feel I was significantly underselling my property after coming by new information then I would try to correct the situation. Why shouldn’t I? These are big transactions in people’s lives for both sellers and buyers.

In England until contracts are signed both sellers and buyers are free to change their minds. How can exercising that right be bullying?

I can see it is a terrible situation to be in but bullying?