Property Overage Agreement
Overage is a type of ‘reverse option’ (see out option product) – it’s the reservation of the right to share from the benefit from future development of land you’ve sold. It’s part of the commercial risk-sharing arrangement in a property transaction, and might arise through contingencies such as planning uncertainty, market changes or even unknown engineering consideration such as ground contamination. A right to share the financial benefit of future development of land you have sold may be an important element of a transaction occurring, now.
This product is for our drafting to the specification we have been told is agreed a contract for the right to share in future benefits. These types of arrangement may also be registrable at HM Land Registry – which, if it arises, is included. The product does not include our involvement in the agreement of the terms.
How long will it take?
We don’t generally do anything for new clients until our process of client retention has concluded – this involves agreeing the scope of what we are doing for the price (our terms are below), setting-up our client record (that includes ID checks), and producing the bill (payment in advance is required for all new clients).
After that, the production of the agreement is a job that we can undertake in a few hours once we can schedule it in our workflow, that can depend on how busy we are at any particular time. We would not usually take-on a job for which we could not engage within about a working week.
Often the completed agreement will then need to be submitted to HM Land Registry for registration. The time HM Land Registry take to process such a registration varies greatly, depending on how busy they are. Some applications are processed very quickly, up to “next day”; however, most applications appear to languish awaiting HM Land Registry attention; in 2021 many applications were taking about 6 months to be registered – and some types of application can take even longer than that, unfortunately. However, once submitted HM Land Registry process applications on any title in order of submission - so their delay ought not to affect the priority of your application relative to other matters on that title.