Positive overage covenant with restriction: turn overage (overage payable on disposal)

by Practical Law Property

A standard document setting out "turn overage" or "anti-embarrassment" provisions, to be entered into on the completion of a property sale. This standard document is for use where a seller wishes to secure a share of any uplift in value if the buyer sells the property for a higher price within an agreed overage period. It requires the buyer to make an overage payment to the seller, calculated as a percentage of the uplift received upon the disposal of the whole or any part of the property. The seller's position is secured through a positive covenant, which is supported by a chain of deeds of covenant to ensure the obligation binds the buyer's successors in title. This standard document further protects the seller by providing for a restriction to be registered against the property's title, preventing a disposition from being registered without the seller's consent. It establishes a clear framework for calculating payments and managing obligations, making it particularly useful for public sector bodies or charities required to achieve the best consideration on a property sale.