Overage

Overage

Overage is a seller’s right to recover additional payment(s) from a buyer at some point in the future, usually after completion of a sale under which the buyer has already paid an initial purchase price. Often this right is triggered by the occurrence of an event which (after completion of the sale) increases the value of the land (eg the grant of planning or completion of a development). ‘Overage’ and ‘clawback’ are interchangeable expressions. Overage may also be referred to as ‘deferred consideration’, ‘uplift’ or ‘kicker’.

Overage provisions can act in both parties’ interests, because a seller can share in future receipts or uplift in value and a buyer can defer payment until occurrence of the trigger event.

Overage agreements can be very complex to draft (as evidenced by the litigation that has arisen in relation to specific examples over the years). To some extent at least, every overage agreement must be bespoke to

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