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Original poster

Uplift clause

14 replies

Overageclause · 21/07/2024 18:33

Just wondering if anyone has anyone has any knowledge or experience about buying property with an uplift clause?

We've found our dream property (well right now it's a derelict pit with lots of land) but it's subject to a 30% uplift clause for 30 years.

Is it worth trying to negotiate this? We would be willing to pay more now for the property if we could get out of it.

OP posts:
LittleRedY0shi · 21/07/2024 18:46

Have come across these before, but by no means an expert...

Whether you can negotiate it is likely to depend on the beneficiary. In other ones, is the current owner the one who put it in place (in which case, there may be some wiggle room), or was it the owner before that (in which case, probably not).

If it is negotiable, keep in mind that the reason you want to get out of it is the same reason they want it in the first place. It doesn't hurt to offer more and ask, but haggling them down on the term and/or percentage is more likely than persuading them to drop it altogether.

LittleRedY0shi · 21/07/2024 18:47

Argh, can't edit. In other WORDS, not ones

Original poster
Overageclause · 21/07/2024 19:11

Thank you @LittleRedY0shi glad to hear there's a chance of negotiating. It's not something I'd ever come across before and I think it's so cheeky to be able to reap the benefits of someone else's hard work!

OP posts:
MinnieMountain · 21/07/2024 19:22

It might be cheeky OP, but it’s legal,

By all means try negotiating, but the only client I’ve had who successfully had the clause removed was where the house had already been renovated and extended.

fromtheshires · 21/07/2024 19:43

This is becoming a common thing sadly. Sell a literal two walled 'building' and then have an uplift clause for getting PP, building on the land etc or even selling it on.

It's a proper CF thing to do in my view. It's basically saying, here take this land for a fair price (they never sell it for £1 do they) but do anything to it I want money off you for doing nothing.

Original poster
Overageclause · 21/07/2024 19:54

MinnieMountain · 21/07/2024 19:22

It might be cheeky OP, but it’s legal,

By all means try negotiating, but the only client I’ve had who successfully had the clause removed was where the house had already been renovated and extended.

Oh no, sounds doubtful then. You sound knowledgeable so I hope you don't mind me asking, this is the wording -

A Development Uplift Clause is applicable on the Land and Building at a rate of 30% of the uplift in value on any development to the Land over that of Agricultural, Equestrian or Amenity Use, payable on the implementation of each and every planning permission for a period of 30 years.

Does that mean we would have to pay before we'd even built anything?!

OP posts:
Original poster
Overageclause · 21/07/2024 19:55

fromtheshires · 21/07/2024 19:43

This is becoming a common thing sadly. Sell a literal two walled 'building' and then have an uplift clause for getting PP, building on the land etc or even selling it on.

It's a proper CF thing to do in my view. It's basically saying, here take this land for a fair price (they never sell it for £1 do they) but do anything to it I want money off you for doing nothing.

I totally agree! Either do the work yourself and get the return on investment or sell it and be done. It's absolutely not cheap to begin with.

OP posts:
Original poster
Overageclause · 21/07/2024 19:56

I think part of the clause should be that if I lost money then they'd have to pay 30% of that too!

OP posts:
Obeseandashamed · 21/07/2024 19:59

Sadly it is a CF thing but it first started to stop developers buying up land cheaply and hammering landowners down on price to then go on and make a fortune. Some would say it's just business but I do sympathise as there have been a number of properties we lived but didn't buy due to worries about being liable for overage payments.

MinnieMountain · 21/07/2024 20:09

I’d need to see the exact wording, but basically as soon as you get planning permission and do ANYTHING to start work it becomes payable.

Rollercoaster1920 · 21/07/2024 21:04

It's worth checking whether permitted development would count. I don't think it does. If so do you want to do more than the very generous permitted development limits allow?

If you do then the covenant seems to be doing what it should.

MinnieMountain · 22/07/2024 05:22

Permitted development will almost certainly count. Overage clauses are designed to catch anything.

hattie43 · 22/07/2024 05:51

Uplift causes are quite common around here with land sales but I've not heard it so much including property.

Barnabyted · 22/07/2024 08:52

Am I right in assuming that you are able to build your “dream property” without the uplift clause coming into effect?
If that is the case and you have no plans to apply for planning permission to build other dwellings on the land, then the uplift cause won’t affect you in any way.
if you do decide that you want to use the rest of the land to make a profit on, once you apply for planning permission and it is approved, I believe you are then liable for the increased value of the land. Land with planning permission is more valuable than utility/ agricultural land.
To frame it a different way, by applying for planning permission and getting it, you ( and the old owner) are benefitting from the increased value of the land by only paying a planning application fee to the council.

if you do go ahead with the purchase, I would strongly recommend looking at the details on how the uplift is calculated. In a friend’s case, they were liable for the increased value of the land once planning permission was gained, whether they built on it or not.

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