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Another Overpriced House

Has anyone come across this before?

In The Event Of A Buyer Applying For Planning Permission For Redevelopment Of The Property And Gardens An Overange Clause Is In Place Entitling The Vendors to 50% Of The Increased Value.

It would appear that there is a clause which means that if you stick an extension on, the previous owner sends a surveyor round and sends you a bill for 50% of the improvement in value!

Is this unusual? Presumably there is some sort of time limit on it.

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Another Overpriced House

Has anyone come across this before?

It would appear that there is a clause which means that if you stick an extension on, the previous owner sends a surveyor round and sends you a bill for 50% of the improvement in value!

Is this unusual? Presumably there is some sort of time limit on it.

Nope and I'd strike it out of my contract. Contingent consideration if planning permission is granted maybe. 50% improvement value?? I don't think so. That said, the precise wording would need to be examined, if I could get somebody to shoulder a 50% loss at the right time...

Edited by Charles_Darke

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Another Overpriced House

Has anyone come across this before?

It would appear that there is a clause which means that if you stick an extension on, the previous owner sends a surveyor round and sends you a bill for 50% of the improvement in value!

Is this unusual? Presumably there is some sort of time limit on it.

If I saw a house with such a clause, I'd make removal of the clause a precondition of even talking to them. Unless the house was 50% undervalued or similar.

Billy Shears

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Is this for real?

Look. When I eventually by a house... and I think it lacks an extension and i need one for my family if i decide to build one

its my time and effort. My property my effort. A clause like this is just evil. If they think they can get an increased value for a bit of refurbishment then they should do it before selling. Who decides the value added anyway?

I think this is a lazy self employed house fixer and seller. Buy a house with pottential... sell it on with this clause and if the people

buying out from you do any work then you profit... and so prevents you from lifting a finger.

What is this all about.

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What happens if the purchaser then sells the house on in a few years time without any improvements having been carried out? Does the "entitlement" of the oringal vendor pass down the chain? Surely this would make the house more difficult to sell on, in which case I'd be expecting a discount off the selling price!

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What happens if the purchaser then sells the house on in a few years time without any improvements having been carried out? Does the "entitlement" of the oringal vendor pass down the chain? Surely this would make the house more difficult to sell on, in which case I'd be expecting a discount off the selling price!

i d avoid these properties with a barge pole to be honest

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Guest muttley

I think this is a lazy self employed house fixer and seller. Buy a house with pottential... sell it on with this clause and if the people

buying out from you do any work then you profit... and so prevents you from lifting a finger.

I know the house, and it hasn't come onto the market for at least 10 years, probably much more.

Maybe there is a case for someone not wanting to sell their house, and see it flattened to build a few shoe boxes.

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It is an Overage Clause, not Overange

With a property like that which has potential to be converted into flats and additional units built in the garden it would be sound legal advice to insert a clause which makes it less attractive to pursue planning permission or at least benefit from the much enhanced value.

Contracts are littered with clauses and covenants to stop things happening and this is nothing new, agents put it clearly on the details so what is the problem?

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Contracts are littered with clauses and covenants to stop things happening and this is nothing new, agents put it clearly on the details so what is the problem?

its a good thing they put it in clearly to avoid dissapointment!

But surely if the vendor doesnt want it to be converted, then they should leave it up to the town planners to decide

Edited by notanewmember

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Guest muttley

With a property like that which has potential to be converted into flats and additional units built in the garden it would be sound legal advice to insert a clause which makes it less attractive to pursue planning permission or at least benefit from the much enhanced value.

Contracts are littered with clauses and covenants to stop things happening and this is nothing new, agents put it clearly on the details so what is the problem?

Thanks. That makes sense.

What if the new owner demolished the stables and added a granny flat? Is that likely to be covered too?

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It is an Overage Clause, not Overange

With a property like that which has potential to be converted into flats and additional units built in the garden it would be sound legal advice to insert a clause which makes it less attractive to pursue planning permission or at least benefit from the much enhanced value.

Contracts are littered with clauses and covenants to stop things happening and this is nothing new, agents put it clearly on the details so what is the problem?

I'm sorry but that doesn't sound right. Why would it be sound legal advice to insert such a clause? The seller has no incentive to care what happens to it after it's sold. These additional restrictions make it harder to sell the property. Why is it sound legal advice to do such a thing? Whose interest is it in (other than the laywers, of course)?

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Yes, I've seen loads of them in Derbyshire. Every wealthy retiring baby boomer seems to be slapping them onto the deal. I nearly bought an ex rectory where the vendors wanted 50% of any profit from sale of the land if separate. For 40 years!

They'd already built two houses in the garden themselves and were going to live in one!

Some people just take the p!ss.

In the end, although I'd haggled it off the deal and knocked 40k off I just couldn't face living next door to them and found an excuse and left.

The next mug from down south however paid the asking price and I think took the covenant!

Oh well.

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Yes, I've seen loads of them in Derbyshire. Every wealthy retiring baby boomer seems to be slapping them onto the deal. I nearly bought an ex rectory where the vendors wanted 50% of any profit from sale of the land if separate. For 40 years!

They'd already built two houses in the garden themselves and were going to live in one!

Some people just take the p!ss.

In the end, although I'd haggled it off the deal and knocked 40k off I just couldn't face living next door to them and found an excuse and left.

The next mug from down south however paid the asking price and I think took the covenant!

Oh well.

Well, I'm bemused by it all - I still think it doesn't sound right to me. Why should a previous owner benefit from future developments when they carry no risk?

It just goes to show you should always read the small print. I did in my last job, and I'm glad I did. Tthere was a clause that stated that any idea or software I worked on while employed automatically belonged to the company (this is not unusual in software). I already had a couple of products that I was selling, both still in active development. I made sure that those clauses were removed from my contract as a condition of accepting employment.

It all paid off when the company merged with another. I had lawyers from the new company trying to take my products off me, which had been used in the company's product. I waved my ammended contract at them and they (eventually) went away.

EDIT: corrected a bad typo.

Edited by AFineMess

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It is an Overage Clause, not Overange

With a property like that which has potential to be converted into flats and additional units built in the garden it would be sound legal advice to insert a clause which makes it less attractive to pursue planning permission or at least benefit from the much enhanced value.

Contracts are littered with clauses and covenants to stop things happening and this is nothing new, agents put it clearly on the details so what is the problem?

What is the problem ???? ITS CuN+IsH........

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There was a clause that stated that any idea or software I worked on while employed automatically belonged to the company (this is not unusual in software). I already had a couple of products that I was selling, both still in active development. I made sure that those clauses were removed from my contract as a condition of accepting employment.

That's the default legal position in the UK. Any intellectual property created in the process of employment belongs to the employer - they had no need to state it explicitly. What you need to do is not just remove those clauses but add a clause stating that you retain the appropriate rights.

This does not constitute legal advice, I am not a lawyer and this is off topic.

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That's the default legal position in the UK. Any intellectual property created in the process of employment belongs to the employer - they had no need to state it explicitly. What you need to do is not just remove those clauses but add a clause stating that you retain the appropriate rights.

Not to any IP created outside of the process of employment however -- anything you do on your own time, on your own premises with your own kit is yours, unless explicitly stated otherwise in the contract.

This does not constitute legal advice, I am not a lawyer and this is off topic :)

Phil

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I'd Like A Tax On Capital Letters Please As The Author Of The Ad Might Then Be Dissuaded From Abusing Them.

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Another Overpriced House

Has anyone come across this before?

It would appear that there is a clause which means that if you stick an extension on, the previous owner sends a surveyor round and sends you a bill for 50% of the improvement in value!

Is this unusual? Presumably there is some sort of time limit on it.

Walk away, the cheeky tossers

Maybe there is a case for someone not wanting to sell their house, and see it flattened to build a few shoe boxes.

I think you'll find it's all about the money :)

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Anyone want to buy my computer?

I must state though... If you upgrade the MOBO, GFX CARD, CPU and RAM I want 50% of the profit if you were to sell.

Right, glad thats clear.....

Listen guys.... people need to stop getting emotional about property. This is a buisness deal!!! I either buy the property and OWN IT or I dont. Any clause like this should be negotiated to either REMOVE IT or say that with this clause in place my offer is only £800K as I cannot change a house I own. Its like it being a listed building ffs!!!

I personally, would tell them to p*ss off!

TB

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It's a bit like an option relating to planning permission.

It is very common for a developer to buy an option to buy, which they will only exercise if they get planning permission (with a price set at "with planning permission" price). The owner doesn't want to sell at current use value because they know planning permission is likely, but a developer doesn't want to pay for planning permission until it is 100% certain.

In this case rather than buy an option and a year later pay "with planning permission" price, the buyer would be paying "current use value" price, but in the knowledge that they could face having to pay further payments later depending on the planning situation.

I would rather buy on this basis than pay large amounts of extra money up front for "hope value" (which is the alternative).

At the end of the day the market decides. So long as people are up front from the start then there is no problem.

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Not to any IP created outside of the process of employment however -- anything you do on your own time, on your own premises with your own kit is yours, unless explicitly stated otherwise in the contract.

This does not constitute legal advice, I am not a lawyer and this is off topic :)

Phil

I am a lawyer and have to deal with this sort of stuff all the time - the problem is not when the relationship works, it's when there's a dispute or you want to sell the company - the buyer wants to know he's got the IP in the business, it's a question of risk and he's going to struggle to get past his bankers and his own credit committees if the main software IP MAY be vested in whole or in part in someone else and the company does not have exclusive rights to it - we get all the time the stuff about "it's fine" but until you have had one smart IT guy threatening to scupper a deal because he wants £500K in his back pocket to sign over the IP, it seems irrelevant.

The basic premise of the above is correct, the problems start with grey areas, especially as our loveable IT people have an aversion (sensible) to paying tax so it's often a consultancy arrangement, not an employment relationship (if they have drafted their agreement properly...... [which 90% of the ones I see don't [despite what the IT bloke who is also apparently an expert on employment law usually thinks - I don't tell you how the magic box works, you don't tell me my job]]).

As for the term in the contract, I am amused by the 'agents make it clear' - you mean those unregulated people - of course they don't. I have seen it in three contracts for properties I have bought - standard response to their conveyancer, take it out and if you even raise it again, my solicitor has been explcitly told that to even discuss it is outside the scope of his retainer and will not even talk about it and if it comes back in the second draft, I will reduce the offer. Your client wants to sell at X price, we have agreed X price, he is not to gain from any improvements I make. It's not come back yet.

AS always this is not legal advice, get your own, the value of your house can go up as well as down and if you get it wrong, we will put your mother on the game etc....

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  • 301 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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