Definition 1
Net Zero Overage means a sum to be paid by [Party A] if [Party A] fails to meet its Net Zero Objectives. This will be calculated in accordance with the formula in [clause/ schedule ● ].
Definition 2
Net Zero Objectives means [all of the following]:
(a) maximise the proportion of housing in the Development that meets Level 6 of the Code for Sustainable Homes [or any successor or equivalent standard];
(b) use construction materials with the lowest Embodied Carbon reasonably available;
(c) maximise the generation of renewable energy on the Development;
(d) minimise the use of heating and hot water technologies that use Hydrocarbons or produce Greenhouse Gases;
(e) establish a programme to produce and sell renewable electricity generated by the development to residents or third parties;
(f) maximise capture of carbon dioxide at the Development by mechanical or natural means;
(g) use Offsetting for the Development as a last resort;
(h) minimise the use of energy by the development using smart grid, demand side energy management and other technologies;
(i) prioritise the use of electricity from Renewable Energy Sources over all other types of fuel on the Development;
(j) maximise the use of Electric Vehicles within the Development including by installing a substation with sufficient capacity to be able to support the related charging requirements; and
(k) connect into existing district heating schemes where possible.
Drafting notes and guidance
An overage clause is generally included in a commercial property or land sale contract by the seller so that the seller is entitled to receive additional funds post-completion if a ‘trigger event’ takes place.
In this case, the trigger event is the buyer’s failure to meet the net zero objectives (as defined) post-completion.
Rory’s Clause (Net Zero Land Promotion Agreement) uses this definition to:
- discourage buyers from failing to meet the net zero objectives set in the sale agreement; and
- allow landowners to influence the climate impact of a development.
Option 2
If using this definition, consider which of the net zero objectives need to be included in your agreement and tailor the menu accordingly.