Overages are never simple. A recent case (November 2020) has shown how easy it is for unintended consequences to occur. The Court of Appeal held in the case of Morris Homes Limited -v- Cheshire West and Cheshire Council that the income received by the developer on a reversionary ground rent sale was to be taken into account when calculating the sales overage payable by the developer. This could have been avoided; and is another example of the care that needs to be taken when drafting overages.
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Overage : Unintended Consequences
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Lord Neuberger: "The mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly, or even disastrously, for one of the parties is not a reason for departing from the natural language."
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