Positive overage covenant with restriction: overage payable on earlier of implementation of planning permission and disposal of property with benefit of planning permission

by Practical Law Property

A standard document overage deed, intended for property transactions in England and Wales, that details a buyer's obligation to make an overage payment to a seller. The payment obligation is triggered by the earlier of two key events occurring for each planning permission granted during the overage period: the implementation of the planning permission or the disposal of the property with the benefit of that permission. This standard document sets out the method for calculating the payment based on the uplift in the property's value, distinguishing between its "Base Value" and "Enhanced Value". To protect the seller's entitlement, this standard document establishes a positive covenant that is secured by requiring subsequent owners to enter into a deed of covenant, creating a chain of liability. It also provides for a restriction to be entered against the property’s title at HM Land Registry. The framework includes key definitions, notification requirements, and a dispute resolution procedure involving an Independent Surveyor.