Publication
Publication
Overage, clawback, deferred consideration, anti-embarrassment, uplift…however it’s described, the mechanism whereby a seller of land is entitled to a “top-up” to the purchase price beyond completion if a specified trigger event occurs always introduces additional complexity into development transactions. Yet, overage is the most common means of maximising the value of development land whilst avoiding a buyer overpaying for a potential site before that trigger event has occurred. In this article, we demystify some key drafting points to unlock the complexity which surrounds overage clauses, touching upon:
Overage clauses facilitate development and seller profits but require careful drafting and legal advice. Early agreement as to the commercial points can help streamline the drafting process.