Rule against perpetuities meaning

Basic terms At the outset, assess whether overage suits the transaction. Your client might be better protected by agreeing a higher purchase price or by entering into a conditional contract instead. Overage provisions can be intricate and expensive to negotiate. If overage is to be applied, consider when the seller expects or hopes to receive a further payment and how the buyer could avoid activating the overage. Ensure the overage includes clear definitions of: the overage period (note that, from 6 April 2010, the rule against perpetuities does not apply to most commercial interests and, if no overage period is specified, there is a risk the arrangement could be perpetual) the property that will be subject to the overage any individual units to be sold or constructed, making clear whether parking spaces and other ancillary areas form part of a unit for the overage calculation Include a ‘good faith’ clause, as this may help if the buyer does something unexpected to...

Basic terms At the outset, assess whether an overage arrangement is right for the deal. Your client might be better served by agreeing a higher purchase price or entering into a conditional contract instead. Overage provisions can be intricate and costly to negotiate. If overage will apply, check that the terms reflect the buyer’s intended use of the site. the overage period (note that, from 6 April 2010, the rule against perpetuities does not apply to most commercial interests and, if no period is specified, there is a risk the agreement could be perpetual) the property that will be subject to the overage any individual units to be sold or built, making clear whether parking spaces and other ancillary areas are included within a unit for the overage calculation Include a ‘good faith’ clause, as this may help in the event of a dispute...

Call or put option? In a call option, the purchaser holds the reins, as it may demand transfer of the asset. The seller should recognise that its intentions for the site could be curtailed by that right, and plans for the property restricted. A put option, by contrast, places control with the seller, enabling it to require the purchaser to take the property and complete the acquisition, obliging the buyer to buy. Option period For a call option, the vendor should be mindful that the land could be effectively frozen throughout the option window, potentially sterilising its use. Accordingly, the deal ought to state a clear long‑stop date to cap the period. The Perpetuities and Accumulations Act 2009 (PAA 2009) removed the rule against perpetuities for options, so those granted on or after 6 April 2010 do not need a specified long‑stop date in this context. Before PAA 2009, a call option lapsed if not exercised within 21 years. Where exercise depends on the buyer securing...

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In this issue: Disputes and remedies Repairing obligations and dilapidations Service charges Contractual issues Rent and rates Enforcing security and property insolvency Property disputes in Scotland Additional Property Disputes updates LexTalk® Property Disputes: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Latest Q&As Disputes and remedies Costs application following a partly successful rights to light claim (Cooper v Ludgate House) In Cooper v Ludgate House Ltd [2026] EWHC 484 (Ch), the Chancery Division addressed costs after a decision where flat leaseholders proved both rights to light and their infringement by the developer’s project. Damages in lieu were ordered on a negotiating basis—£350,000 for Mr Cooper and £500,000 for the Powells—while an injunction compelling the defendant to reduce the building to avoid actionable interference was refused (see Cooper v Ludgate House; Powell v Ludgate House [2025] EWHC 1724 (Ch)). The central...

In this issue: Residential tenancies Key developments and horizon scanning Disputes and remedies Repairing obligations and dilapidations Enfranchisement and right to manage Trespass and adverse possession Contractual issues Additional Property Disputes updates LexTalk®Property Disputes: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Residential tenancies Errors in section 21 possession procedure documents were not material (Hamer v Levy) In Hamer v Levy [2026] EWCA Civ 662, the Court of Appeal (Civil Division) allowed the appellant to seek permission to appeal, but nevertheless dismissed the appeal. She contested an order that had struck out her challenge to a District Judge’s possession order. The landlord had issued a section 21 notice to obtain possession of the property let under an assured shorthold tenancy. The Court confirmed that any flaws in the section 21 possession documentation were immaterial. It further held there was a procedural...

A contractual option to take a lease for a further term is a ‘call’ option It gives the tenant a one-sided entitlement to demand a renewal lease. The tenant is not compelled to use it, yet upon exercise the landlord must honour the bargain. The ability to seek a renewal lease is commonly conditional on satisfaction of conditions precedent (for example, all rent paid and other tenant covenants observed) – for further discussion see Conditions precedent below. A call option is a contract for the sale of an interest in land within the Law of Property (Miscellaneous Provisions) Act 1989, s 2(1). The option must: be in writing contain or incorporate all of the terms expressly agreed between the parties be signed by or on behalf of each party When the tenant exercises the option by giving notice to the landlord, that act is simply a unilateral trigger for the obligation to grant the lease. Accordingly, a valid exercise of...

An option agreement is a contract of sale and must satisfy section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Accordingly, it must: be in writing set out or incorporate every term expressly agreed by the parties be executed by, or on behalf of, the parties By contrast, a trigger notice merely activates the option and is not itself a sale contract. As a result, the trigger notice need not bear both parties’ signatures. Exercising the option Call option agreements are interpreted strictly, and the option may lapse if the holder does not exercise it in the correct manner. Time limits Typically, the option will stipulate that the grantee must exercise it within a defined period (see Practice Note: Option agreements—land—the need for a long-stop date). If it is not exercised within that window, it will lapse because time is of the essence—this will be implied even if not stated expressly...

This Practice Note summarises Bermuda trust law at a high level and signposts its distinctive characteristics, including expansive reserved powers rules, codified Hastings Bass measures, and adaptable perpetuity provisions. Bermuda’s trust legislation Trustee Act 1975 (TA 1975) – addresses, among other matters, trustees’ powers, entitlements and duties, together with the Bermuda courts’ supervisory jurisdiction in trust matters. Trusts (Special Provisions) Act 1989 (TSPA 1989) – sets out Bermuda’s broad reserved powers regime, firewall protections, and rules on purpose trusts. Perpetuities and Accumulations Act 2009 (Bermuda) (PA 2009) – states that trusts created on or after 1 August 2009 may exist indefinitely provided they do not own Bermuda land, and permits the disapplication of the rule against perpetuities for earlier trusts. Trusts (Regulation of Trust Business) Act 2001 – requires the licensing of persons conducting trust business in Bermuda. Who can serve as trustee? There is no need for trustees to be resident in Bermuda, although appointing licensed local trustees...