With the pressure for more housing in the south of England, so the pressure to release more land for development increases too. You may own property that will one day be ripe for development.

One common way of dealing with this is Development Clawback or Overage. This is written into the sale documents and gives you the right to receive a share of the increase in value - arising upon the grant of planning permission for development. That sounds easy enough but these deals can be quite complicated to agree and draft.

For example, what if your property is to be developed in conjunction with adjoining property? Consideration needs to be given as to how to value the land in that situation because different parts on the development will have different values. For example, an area that is to be dedicated to the local authority as open space will have little value. On the other hand what if your property is the key without which the adjoining property could not be developed? This might be because the only feasible access to the adjoining property is via yours.

What happens if the developer secures a low value permission, pays you your share and then goes back for more? What if the developer sells the land before planning permission is gained? Careful consideration needs to be given as to how to ensure that the successor is bound by the terms.

Is the developer to be obliged to try for planning permission or is the deal just to protect against that possibility?

All these issues may involve some compromise and crystal ball gazing if the potential development is some way off and its eventual nature far from clear. Indeed, in some cases it may be best simply to prevent development at all so that a release can be negotiated when the prospect of planning is nearer and the size, type and value of the development clearer.

From a legal point of view, the best way to achieve this is to retain a ‘ransom’. This might be a one foot strip across the boundary or boundaries through which access to the site will have to be obtained, ie a ‘ransom strip’. It might be through a covenant not to build- although there are inherent legal weaknesses in that approach.

There is no such thing as a standard arrangement and agreements addressing these issues come in all shapes and sizes. Not only do they give rise to complex legal issues but also to commercial issues. Therefore, it is often vital to obtain advice from an experienced commercial property agent or surveyor.