Categories:Real Estate,UK

Using restrictive covenants to secure overage payments

In the recent case of Cosmichome Ltd v Southampton City Council, the High Court considered the suitability of using a restrictive covenant to secure an overage payment.

Overage is a deferred payment that a seller may be entitled to demand after completion of a disposal of a property if a specified condition is met.

An overage obligation must be protected by the seller so that it can be enforced against successors in title to the buyer of the property as well as the buyer itself because the obligation to pay may arise after the original contracting buyer has sold the property on. Without adequate security in place, overage provisions can prove virtually worthless…

If you are registered and logged in to the site, click on the link below to read the rest of the Shoosmiths briefing. If not, please register or sign in with your details below.

Briefings from Shoosmiths

View more briefings from Shoosmiths

Analysis from The Lawyer

  • Hester: declined bonus worth almost £1m

    Pay checks

    Compliance and corporate governance codes for large financial institutions will undoubtedly include provisions to regulate high pay in the future

  • high street 150

    Focus: Alternative business structures - Law and new order

    There’s more to the ABS model than attracting the man in the street and procuring external investment. Partners at the big corporate firms, take note…

Overview

2 Colmore Square
38 Colmore Circus Queensway
Birmingham
B4 6BJ
UK
http://www.shoosmiths.co.uk

Turnover (£m): 87.00
No. of Lawyers: 373