Buyng Land

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Buyng Land

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spiritatliberty

Joined: 18 Aug 2014
Posts: 1

Posted: Tue Aug 19, 14 6:59 am Post subject: Buyng Land
I am buying apiece of pasture land for my horses. The buyer tells me that when he bought the land his seller put on a 25% uplift clause on. He says that I am still liable to pay this and he wants to put on a 25% cause as well. This means I could end up having two people to pay of is this correct?

Piggyphile

Joined: 02 Apr 2009
Posts: 891
Location: Galicia

Posted: Tue Aug 19, 14 8:23 am Post subject:
Only if you change the use of the land making it more valuable is my understanding. But I am not an expert. You only pay out if for example you get planning permission for a house on it making it worth tons and then the previous owners get their share (a percentage of the increase in value). A sort of lottery ticket I suppose. Best to ask someone who actually knows though.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Aug 19, 14 8:24 am Post subject:

Subject to what is actually written into the contract it would seem to be perfectly normal - otherwise you could sell the land to a holding entity and buy it back to get out of your obligations.

You don't have to agree to the uplift clause but then the vendor doesn't have to sell.

Assuming you're using a solicitor they will be able to advise. (Better than a random person from the internet with no legal experience!

)

My main concern would be how do you track down the people to pay if in say 30 years you sell.

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Aug 19, 14 8:39 am Post subject:

An uplift clause is becoming more common, at least round here. Him adding a second one smacks of greed, but it's not impossible. If you want it as horse pasture, there's nothing to worry about. It means, if I read it right, that if you buy it for �10,000, and then getting planning permission, for example, and it becomes worth �100,000, you'd have to pay them both 25% of the increase in value (�90,000).

I'd be having an interesting discussion with the first owner about how the cost of the second uplift impacted the value of the land ("It's not worth �100,000, only �75,000, due to the uplift bill...") but that can be sorted with a careful contract.

I have some land with a similar clause on it. I am obliged to pay within 12 months of the value increasing, regardless of whether I sell it, or not. So, getting planning permission would cost me the uplift, even if I never used it.

It lasts for 20 years, and is currently 50%, in my case. Time and values are, of course, negotiable. Depends how much you want the land as it is. My vendor's genius solicitor allowed me to removed a house-plot-sized area from the clause without question.

Finding someone in 30 years isn't really your problem, I would guess. You could do all that was reasonably expected fairly simply, and your obligation would end there.

vegplot

Joined: 19 Apr 2007
Posts: 21301
Location: Bethesda, Gwynedd

Posted: Tue Aug 19, 14 8:42 am Post subject: Re: Buyng Land

spiritatliberty wrote:

I am buying apiece of pasture land for my horses. The buyer tells me that when he bought the land his seller put on a 25% uplift clause on. He says that I am still liable to pay this and he wants to put on a 25% cause as well. This means I could end up having two people to pay of is this correct?

There's a discussion here on how the second uplift would affect the first. Some room for negotiation perhaps?

Edit: Nick got there first.

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