Restricted covenants/Indemnity insurance

workingwoodlands

OK, I've never used one of these new fandangled forums before so bear with me!!

My partner and I are in the process of buying a house, but ... it has a one of those very annoying and totally pointless restrictive covenants on it that if we want to alter the external appearance of the house we must first obtain consent from the original developer.

We do intend to extend the roof space, this has been done in the majority of houses on the "estate".

As far as I aware the original developer has been bought out by xxx, who has been bought out by xxx. So ... if we can't find them to ask for consent I beleive we can take out a one-off indemnity insurance which brings me to my request, what will this cost?

RiskAdverse100

Restrictive covenant indemnity insurance is normally taken out to cover you for a breach of a restrictive covenant that has already happened.

Often the restrictive covenant is in an extremely old document referred to in the title registers and the breach in fact happened many years ago.

I would speak to the owners of those properties who have already done a loft conversion. You may find that the procedure for getting consent is relatively painless.

If they didn't get consent but have heard nothing since from anyone about breaches of the restrictive covenant then you may decide to do the same! After 12 months of the breach you could then take out insurance. For cover of up to £500k the premium is unlikely to be more than £300.

RiskAdverse100

workingwoodlands

Thanks very much for this Risk. You think you are on the home straight with the purchase and then a covenant pops up! Your comments have put my mind at ease a little more..

I don't think we will have a problem getting consent from the developer if we can find them! If we can' then I now know that an idemnity policy will not bankrupt us.

RiskAdverse100

I perhaps didn't make it totally clear in my last post that for all the indemnity policies that I have come across the breach of the restrictive covenant must have happened at least a year before the policy is taken out. The insurers no doubt take the view that if the person with the benefit of the restrictive covenant doesn't do anything about a breach for a year then they probably never will!

RiskAdverse100