Overage Agreements

Protecting the Future Value of Your Land

When selling land, its full value may only be realised in the future. Where development is a realistic possibility, an overage agreement allows landowners to benefit from any increase in value after a sale has completed.

Overage is commonly used where land is sold without planning permission but has development potential. It enables the seller to share in the uplift if planning or development later enhances the land’s value.

What Is An Overage Deed?

An overage deed is a legally binding agreement between a seller and a buyer. It provides for an additional payment to the seller if a specified event occurs in the future, most often linked to planning or development activity.

What Triggers An Overage Payment?

Overage payments are only made when agreed trigger events take place. These are set out clearly in the deed and commonly include:

• The grant of planning permission
• The sale of land with planning permission in place
• The commencement of development

Once triggered, the seller becomes entitled to a share of the increase in the land’s value.

Key Points To Consider

When agreeing overage, it is important to consider:

• The length of the overage period, which often runs for twenty to sometimes up to fifty years
• The type of development that should trigger payment
• How overage obligations will bind future owners
• How the overage payment will be calculated
• The percentage of the increase in value to be paid to the former owner

Clear drafting and robust valuation provisions are essential to avoid disputes and protect long-term value.

How We Can Help

At Wilson Browne, we understand that overage agreements can be complex and commercially sensitive. Whether you are selling land and wish to secure future uplift, or purchasing land subject to an overage arrangement, our experienced Commercial Property Team is here to help.

We provide clear, practical advice tailored to your objectives, helping you protect value and move forward with confidence. If you would like to discuss how we can assist with an overage agreement, please contact our experts in the Commercial Property Team today.  The first call is free!