Glossary definition
Overage
A contractual mechanism in a land sale that entitles the seller to receive additional payment if specified trigger events occur after completion, typically the grant of planning permission or achievement of sales values above an agreed threshold. Overage clauses are common on land transactions where the buyer intends to obtain planning consent for a more valuable use than the current designation.
Definition
A contractual mechanism in a land sale that entitles the seller to receive additional payment if specified trigger events occur after completion, typically the grant of planning permission or achievement of sales values above an agreed threshold. Overage clauses are common on land transactions where the buyer intends to obtain planning consent for a more valuable use than the current designation. Lenders need to understand overage obligations as they can create additional charges on the title and may crystallise as a cost that reduces the developer's profit.
See also
Closely related terms.
Residual Land Value
The value of a development site calculated by taking the gross development value of the completed scheme and deducting all development costs including build costs, professional fees, finance costs, and developer profit.
Site Acquisition
The process of purchasing a development site, including negotiation, due diligence, exchange of contracts, and completion.
Planning Permission
Formal consent from the local planning authority required before carrying out most types of development, including new construction, material changes of use, and significant alterations to existing buildings.
Land Registry
HM Land Registry is the government body responsible for registering ownership of land and property in England and Wales.
Further reading
Guides that touch this term.
Guide
Legal Due Diligence in Development Finance: What Solicitors Check
Legal due diligence is the backbone of every development finance transaction. This guide explains what solicitors investigate, common issues that delay completions, and how to prepare your legal pack.
9 min read readReadGuide
How Does Development Finance Work? A Complete Guide for UK Developers
A ground-up guide to how development finance is structured in the UK, covering loan mechanics, drawdown schedules, monitoring surveyors, and what lenders look for in your application.
5 min read readReadGuide
The Capital Stack in Property Development: How to Structure Your Funding
A comprehensive guide to understanding and structuring the capital stack in UK property development, from senior debt through mezzanine to equity contributions.
9 min read readRead
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