Page 6 - Demo

2. Overage Defined
It is a contractual entitlement of the seller to receive an additional payment or payments from the developer on the happening of a defined event or events such as the grant of planning consent or an enhanced planning consent, the sale or letting of a unit or the last unit in a scheme, or securing (net) profit above a stated level within a set time (the “overage period”). Some overages are linked to several types of event: implementation of planning and sale, for instance.
The payment will usually be expressed as a percentage of the uplift in value (usually having deducted certain costs) from the original price paid (often defined as “base value”). Sometimes it will be a fixed sum; for example, linked to the amount of extra square footage secured via planning.
It is a positive obligation and as such does not “run with the land” and is not a legal interest in land; this is important as it is not automatically enforceable against the next owner of the land. (See further below.) It is a contractual right which creates a chose in actioni.
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