Breach of restrictive covenant - help?

humphrey_2

We are second owners of a house built ten years ago. We built a conservatory a couple of years back, having obtained the usual planning permission. Now we are looking to move and I have dug out a pile of old paperwork from the loft relating to when we bought the house some 6 years ago. Amongst it are details of a 20 year restrictive covenant that says that you cannot construct on the property without the builders consent and that your plans should be submitted to them with an admin fee so that they can consider your plans and decide whether to grant permission.

Yikes! We didn't do that, just got permission from the local authority and went ahead and built. What is going to happen when our purchaser's solicitor picks that up? Feeling foolish as the solicitor even pointed it out in the covering letter, but it just got filed away and forgotten :rolleyes:

Feeling a bit worried now!! Am hoping that there is some sort of indemnity insurance get out, please can some lovely person in the know advise me?

Hailstorm

Exactly the same thing happened with the house I am purchasing. My vendors built a conservatory when a convenant states they should have got permission from the builder.

When my solicitor found out and asked if they had permission they went back to the builder and obtained retrospective consent. We didn't ask them to do that, they just did (I don't know if their solicitor advised them to do so or if they did it completely off their own back). Before they got consent my solicitor did say that if they didn't have permission he would ask for an indemnity policy so you can get them.

I don't know whether or not going back to the builders is a better option then getting indemnity insurance. You would probably need to ask your solicitor.

humphrey_2

Thanks Hailstorm. My fear of doing that is that what if the builders say no? Seems the riskier of the two options and depending on the cost of the indemnity insurance, and in our case the fact that the builder will charge an admin fee for considering it, there probably isn't much in it price wise.

lowtidesurf

I dont really see a reason why the builder will say no he does not want any construction on his site. So I would go and ask.

Is it a large buildingfirm/development company or a local builder?

Richard_Webster

If the solicitors have local knowledge they may know that a particular builder is easily contactable and will give a consent for less than the cost of an indemnity policy.

If you are not sure you will get the consent it is safer not to ask. The problem is that once you have written the letter you are stuck. Sometimes these letters can get lost in a large builder's office and you face a problem getting a reply.

Safest thing is to provide an indemnity policy when selling. These are available provided the work is a year old and there have been no complaints about (from people who have a grudge and might contact builder) and no contact with builder.

Policies have to be for the present market value of the property - they are generally priced in £50,000 bands so go for the top of the band. For instance a company used by many solicitors charges £160 for a policy for a value up to £200,000.

chickmug

I have been on the builders side and can tell you the usual reason for these restrictions is so that buyers do nothing to spoil the nature of that development whilst the builder is still builing & selling.

IMO once the builder is off site they will not give a wotsit.

Ta1ch2

Had the same situation with a previous property I owned, but luckily there was a policy hidden away with the other paperwork. Your solicitor only has the duty to point out certain facts, then it,s up to you. In my case the land had been owned by a church. Good Luck

humphrey_2

Richard_Webster wrote: »

If the solicitors have local knowledge they may know that a particular builder is easily contactable and will give a consent for less than the cost of an indemnity policy.

If you are not sure you will get the consent it is safer not to ask. The problem is that once you have written the letter you are stuck. Sometimes these letters can get lost in a large builder's office and you face a problem getting a reply.

Safest thing is to provide an indemnity policy when selling. These are available provided the work is a year old and there have been no complaints about (from people who have a grudge and might contact builder) and no contact with builder.

Policies have to be for the present market value of the property - they are generally priced in £50,000 bands so go for the top of the band. For instance a company used by many solicitors charges £160 for a policy for a value up to £200,000.

The work is more than a year old and there have been no complaints or contact with the builder (it is a large national firm, not a local builder). The conservatory is very big and a bit "different", but obviously within the planning permission restrictions. Hence why I'm scared the builder might not like it as it almost adds another third to the downstairs accommodation. It's not your normal conservatory :rotfl:. Quite changes the overall feel of the property.

Richard, the house is going on the market at just under £350k, what sort of charge would that incur for the indemnity insurance, do you know?

Richard_Webster

Richard, the house is going on the market at just under £350k, what sort of charge would that incur for the indemnity insurance, do you know?

Guaranteed Conveyancing Solutions (used by lots of solicitors) would charge £220. Legal & Contingency who I normally use would charge £145. Unfortunately it comes down often to the company(ies) used by the solicitors in question. Some firms only use one supplier and so you pay what they charge.

You can't get these policies normally except through a solicitor or licensed conveyancer. We don't get any commission but the underwriting criteria involve technical points that non-lawyers might not understand and it wastes the insurer's time dealing with non-lawyer queries.

Hippychick

Mysolicitorisbetter wrote: »

Just send off a letter to the builder with the admin fee.

The clauses are there so that no one goes causing the builder hassle whilst their still building by clogging up the site with contractors etc or making things look untidy.

On a house this old I would assume there long gone and will bank the cheque and issue the certificate confirming its ok.

If she does that then she cannot get indemnity insuramce whatsoever as it becomes void as soon as the builder is notified. Far easier and quicker to obtain indemnity insurance.

DVardysShadow

Mysolicitorisbetter wrote: »

Just send off a letter to the builder with the admin fee.

The clauses are there so that no one goes causing the builder hassle whilst their still building by clogging up the site with contractors etc or making things look untidy.

On a house this old I would assume there long gone and will bank the cheque and issue the certificate confirming its ok.

Not the brightest idea. I think I would go with Richard Webster rather than your solicitor.

What if the builder says no? That is the end of it and, as Hippychick says, you cannot even get an indemnity insurance.