yummersetter
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Uplift clause on land purchasehas anyone had experience of this - the basic idea being that if you obtain planning permission on a piece of undeveloped land over a period of y years the person who has sold the plot to you is entitled to x% of the increase in value of the land?
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tahir
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The lady who bought the field next door has such a clause, in her case it's 50% of the uplift if development happens within the next 25 years
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yummersetter
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what's the situation with assessing the inflationary change in value? Is there a standard ' cost per acre in the parish' that could be used as a starter for a multiplier of the original purchase price before that is taken from the new enhanced value?
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tahir
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No idea, how you could calc that is beyond me. This 13 acre field with a section 106 agreement was on the market for 3 years, got sold at £20000 an acre, WAY beyond what it was reasonably worth.
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wipka84
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I would have thought it would be valued at the date planning permission was granted with and without the benefit of planning consent. The difference in these values would be what the retainer is calculated on.
It'd be up to your lawyer to make sure that the only calculation that could be applied was the way that the parties intended it to be.
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acca
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I have just bought just under 5 acres with uplift. Get yourself a very savy agricultural solicitor. It is all in the wording of the contract and what appears on the land registry. Try and get 'implementation of planning permission' inserted! Remember that other people can apply for planning on your land. Also that if the uplift is for a long period that the original vendor may have moved on and tracking them or their heirs may tie you up . Since i am running the land for wildlife interest it was no big issue but I did have to ensure that if we sold it on that planning for agricultural buildings were not included.
It does seem that uplift is becoming common. Best of luck
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mechanicalmouse
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I think uplift clauses should be illegal and other such covenants should have much tighter restrictions on their application.
I can understand clauses to prohibit actions that may have a detrimental effect on the character of the area, such as use of materials or size of buildings. However even those, should require those applying the covenant to have some responsibility in maintaining and assisting any restrictions. Also the covenant holder should have an active presence on the attached land.
it is worth noting it is possible to have covenants removed if it can be proved that the restrictions are unsuitable or that the no longer effect the covenant holder. Its a lengthy procedure, but can be done.
But to somehow legally force someone to pay out money for land that have purchased fully and completely because the land value has changed should be outright illegal.
Could you see that working anywhere else. Imagine buying a painting for £100, selling it a few years later for £1000 and having to pay the artist an extra £450 just because his work had become popular.Though saying that I'm sure someone actually tried that somehow.
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crofter
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| mechanicalmouse wrote: |
But to somehow legally force someone to pay out money for land that have purchased fully and completely because the land value has changed should be outright illegal.
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But you are not buying it "fully and completely", depends how much you want the land, I suppose. I have bought land with a "standard security" in favour of the previous owner - if I sell sites for development within 10 years he gets half the proceeds. Quite happy about it because I needed the ground and don't intend to sell.
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resistance is fertile
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It can also be a very sensible way to proceed if you want to gain planning consent on a particular plot.
It allows a fair (lower) price to be paid for the site with then just a percentage of the later value having to be paid out if you successfully gain development consent.
Generally this is much cheaper option than trying to buy a good site that already has PP, and you get to set out your own scheme.
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yummersetter
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Thanks all - still battling this wording before signing - present statement is that uplift payment only applies to residential development but any other change of use, agricultural development etc. that needs planning permission also needs the permission of the person selling to us now before we can proceed (over 40 years - they're moving abroad with the money)
now then, do we have a symbol with jaw dropping and eyeballs flying out of top of head?
So far it's doubled the fees and has added months to completion, this uplift clause.
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RichardW
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Call their bluff. Tell em its the standard uplift on residential only or you will pull out.
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yummersetter
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Yep, that's exactly where we are, today ( they need us to sign tomorrow for their deal to go ahead)
And you know, Frankly I Don't Give A D*** 
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resistance is fertile
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Absolutely. He seems to want all the benefits of you doing all the work to increase value (in any form).
As Richard says, if he's got his own plans dependent on this sale I would play fairly hard - Uplift on Resi and nowt else.
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yummersetter
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well, it's of little use to us till tree-planting time, I can hang on a few months yet 
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mutti
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we're in the same boat.....uplifts seem to be fairly common nowadays. The mad thing about our situation is that the people we are buying from do not have anyone to give their inheritance to really - and they are 90 odd years old so are unlikely to benefit. our villiage has restrictive planning clauses anyway.....
we don't want to build...anything other than pig arks!!
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stumbling goat
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the other clause people use is a "ransom strip".
same impact.
yb
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mechanicalmouse
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| crofter wrote: |
But you are not buying it "fully and completely", depends how much you want the land, I suppose.
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How do you mean? If I buy 12 acres land freehold, that land should be mine. The seller has made their money by selling me the land. The only people that should be able to affect my decisions are the Planning department and local authorities.
Leasehold is different, because you never truly own the land. Again I don't think you should be able to leasehold empty land. Leasehold should be used for flats (where you are owning a area of air) and buildings/area of national interest, and then the real owner should have certain legal obligations to the leaseholder.
Leasehold and uplift on land reeks of Feudal England where wealthy land owners reaped the spoils of someone else's hard work.
At the moment, we're only looking and it will be a while before we can buy.
| Quote: |
I have bought land with a "standard security" in favour of the previous owner - if I sell sites for development within 10 years he gets half the proceeds. Quite happy about it because I needed the ground and don't intend to sell. |
So a standard uplift clause has a limited life and only comes into effect on selling the land. While I hope to avoid such clause it may be unavoidable. I was rather worried it would come in effect on gaining planning permission.
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Treacodactyl
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I think clauses are fine as long as they are worded correctly which is where problems seem to occur. I've been through a purchase where the vendor, not his solicitor, worded the clause and that took ages to sort out.
Without the clause it can mean the land will cost far more, it did in my case, so I was happy with a suitably worded clause as it saved me money and isn't preventing me from doing what I want with the land.
If you're buying agricultural land for example and plan to farm it then a planning uplift clause shouldn't affect you.
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mechanicalmouse
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I'm planning to farm it, but I will need a home for me and my family. Thus planning permission and a change in land value.
I don't mind as long as there is an expiry on the uplift clause and doesn't effect me unless I sell.
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RichardW
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| mechanicalmouse wrote: | I'm planning to farm it, but I will need a home for me and my family. Thus planning permission and a change in land value.
I don't mind as long as there is an expiry on the uplift clause and doesn't effect me unless I sell. |
Your not going to like what the Gov are going to do either then. Some thing like IF you get planning on land & it increases the value even without selling or using the planning you have to pay a TAX on the increase in value.
Uplifts are normally payable when you get planning not if you sell after getting planning but each one can be individual as both sides have to agree to it.
The thing to remember is that you would have paid lots more if you bought with planning that you will by buying without & paying an uplift.
Oh & you are not very likely to get planning any way till you can prove the land will pay & that you have to be there. In my mind if you can prove it then you must be doing it so you have proved that you dont need to be there.
In teh end if you dont want an uplift clause either
dont buy land & then change its use
buy land with planning already on it & pay the going rate for it
dont buy land when the seller wants an uplift
Good luck with that.
Richard
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mechanicalmouse
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I have seen land that is freehold and free of any uplift clause, well at least on the details. If I need to buy land with an uplift clause I will endeavour to ensure the contract stipulates on sale of the land rather than on successful planning permission. As people have said its all down to the final contracts.
I see the point about land with uplift is cheaper than land with planning permission, but I still say you should not be able to make money out of someone else's effort.
In terms of proving we have to be one the land, both local authorities I've talked to are happy to allow temporary accommodation (caravan/ log cabins) while the workers (us) prove our viability. So we should not be in that catch 22 of proving we need to live on land that we've not been living on.
It may be a bit of a threadjack but one source I've read says you need a minimum of 12 acre to be able to get Planning permission base on the "We HAVE to be on the land" clause. Anyone got any thoughts on that?
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Treacodactyl
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| mechanicalmouse wrote: | | I have seen land that is freehold and free of any uplift clause, well at least on the details. |
The bit of land I bought had nothing on the details and the clauses were added after sale was agreed. I would expect the vendors solicitor to mention to his client adding an uplift clause unless the price being paid covers the likelihood of planning being granted.
Good luck with your search, you might wish to start a new thread with your planning question.
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Dr Rob
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There are rather a lot of misconceptions on this thread - do rely on your solicitor's advice/explanations.
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resistance is fertile
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| mechanicalmouse wrote: |
In terms of proving we have to be one the land, both local authorities I've talked to are happy to allow temporary accommodation (caravan/ log cabins) while the workers (us) prove our viability. So we should not be in that catch 22 of proving we need to live on land that we've not been living on. |
Are you sure they are 'happy to allow' (if so please let me know which LPA's they are!  ).
PPS7 makes provision for temporary dwellings to establish a new enterprise (subject to other tests also being met) but it is not usually the case that LPA's are happy to allow this. In allowing a temporary consent they are generally agreeing that if you are financially viable within three years, have every likelyhood of staying so and the functional need to be on site is still justified then they will have to give permanent consent.
As a result this is something they are not normally 'happy' about in our experience.
You will also need a very good plan to establish functional need and sound economic planning on such a small holding.
Be prepared for a bit of a battle planning wise and be realistic about the likelyhood of economic success with your venture.
| mechanicalmouse wrote: | | It may be a bit of a threadjack but one source I've read says you need a minimum of 12 acre to be able to get Planning permission base on the "We HAVE to be on the land" clause. Anyone got any thoughts on that? |
12 acres, may well refer to the minimum landholding to benefit from full Agricultural PD rights. Having said that it may be that some LPA's take a view on what they consider a viable holding size, but that will depend on what you are planning to do there to justify your presence.
Oh, good luck though
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mechanicalmouse
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Thanks for the advice. The LPA's where Carmarthen and Charnwood Borough councils. OK Happy is a bit of a strong word. Acceptable, may be more accurate description.
Time to start a new thread.
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resistance is fertile
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Just be prepared for that to be 'acceptable in principle' and subject to jumping through a lot of hoops
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orhdpos
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I purchased a piece of woodland and the cheeky bugger wanted the max time which is 80 years I believe, after some chat I explained that my Grandchildren would be 76 before they could get any money from this land if it sold at a profit. he worded the original doc that if planning permission was sought by anyone in the next 80 years and I did not revoke it in 3 months the land would revert bact to him. eventually I got it down to 15 years and 20% of any over and above normal land price with in that 15 years reducing down as time decreased in years but it nearly got one of us killed.
orhdpos
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mechanicalmouse
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| orhdpos wrote: |
if planning permission was sought by anyone in the next 80 years and I did not revoke it in 3 months the land would revert back to him.
orhdpos |
What an Evil little man.
As mentioned a few posts before, I don't think anyone that has posted here are certified legal experts. I spent 2 years, writing software, working closely with solicitors and lawyers, and one of the fortunate things I learned about our legal system is its ruled more by "common sense" than doctrine. I'm not saying its fool proof, but does offer a degree of protection against blatant attempts connive via "legal" documents.
I'm fairly sure such a contract would not be legally enforceable but the fact he even put it in makes you wonder about the nature of the man.
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Treacodactyl
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There are some qualified legal experts on the forum and I'm sure they'd agree with me in that rather than hoping a contract isn't enforceable it would be worth getting a solicitors opinion.
Always worth remembering you don't have to accept the initial suggested contract, it's just a starting point to negotiate something agreeable to both parties.
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mechanicalmouse
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Oh I agree get the contract right before hand.
I assumed there would be some certified solicitors here, I just do not think they've posted in this thread yet.
Just pointing out some of the things people try to shoehorn into contracts are not enforceable and are just there to "scare" the other party into compliance.
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yummersetter
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well, we've had a very long-drawn-out, expensive and irritating battle but it looks like our deal is going through today, with the basic residential development uplift clause only and no other conditions.
Went a bit white knuckle ride over the past couple of weeks so I'll be relieved when our feet are standing on our own grass.
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gil
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Phew ! Congratulations - hope today goes through smoothly, and you're building that bridge across onto the new land very soon
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yummersetter
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Done. Signed, sealed, delivered, its ours.
Now then, RiF, any nightclub and brothel modules ready to ship in?
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tahir
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So now to the serious business, what are you going to plant?
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yummersetter
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oww, I wrote an long and involved reply and it disappeared down a timehole in a spluttering forum
I'll come up with a 'suggestions for wot I should plant' thread when I've got some New Field Mud on my shoes, I reckon. No time to think about it now or we won't be home in time for Torchwood 
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resistance is fertile
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| yummersetter wrote: | Done. Signed, sealed, delivered, its ours.
Now then, RiF, any nightclub and brothel modules ready to ship in? |
A whole new market opens up , off-grid rural houses of ill repute (but spotless environmental credentials). We must talk about the potential for this
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