Positive overage covenant with restriction: overage payable on grant of planning permission

by Practical Law Property

A standard document containing overage provisions for inclusion in a schedule to a transfer of freehold property in England and Wales. This standard document is designed to enable a seller (Transferor) to share in the future increase in a property's value resulting from the grant of an express planning permission after completion. The overage payment is triggered when a specified planning permission for development is granted during an agreed overage period and is no longer subject to a third-party challenge, such as judicial review. It outlines a detailed mechanism for calculating the payment based on the uplift between the land's "Base Value" and its "Enhanced Value" with the benefit of the new permission. To protect the Transferor’s interests, this standard document requires the buyer (Transferee) to procure a deed of covenant from any successor in title upon a disposal, creating a chain of liability. This obligation is further secured by the entry of a restriction against the property's title at HM Land Registry, preventing dispositions from being registered without the Transferor's consent. It also addresses the assignment of the overage benefit, dispute resolution for valuation disagreements through an Independent Surveyor, and the Transferor's obligations regarding consents for permitted disposals.