Shock Restrictive covenant discovered

Entertainer

I'm currently well advanced in the purchase of a house. The property was originally one of the barn outbuildings to a main house (which is now flats) and was sold off in the 1950's.

In the early 80's the people who have lived there for decades converted part of the property I'm buying into two flats to go with the main part and let them out. I'm buying all of it under one title number (the flats are both registered seperately for council tax and they were advertised as self contained flats in the agent's particulars.)

The house has just been registered at the LR for the first time and in addition to the deeds having been lost being mentioned in the charges register, I have received a copy of the original conveyance from the 50's when the house was sold off from the main house and it says this:

"Not to erect more than one dwellinghouse and garage on the property thereby conveyed............. No building should at any time thereafter without the prior written consent of the vendor be used for any other purpose than as a single private residence............ nor should the same be used or converted at any time into flats."

This is obviously interesting news seeing as how I'm buying something whose cost reflects it being two flats and a house.

What are the options here? How serious is the situation? The main house is managed by a property management company- is there any way of getting these covenants removed or neutralised as a problem?

angelavdavis

You can usually pay to have convenants removed or take out a one-off indemnity insurance to cover yourself, should someone buy the rights to follow through with these terms.

I had a convenant on my 1890 built house when I purchased it - relating to a ban on changing the external appearance. Since the property was built, it has been rendered, had a conservatory put on it at the back, a lean-to at the side and had the roof replaced with concrete tiles. These were the options put to me by my conveyancing solicitor at the time. The insurance option at the time was about £120. Costs for removing the covenant can vary - I think mine at the time was estimated as costing £10k but this was over 7 years ago.

As a matter of fact, I did neither as I discovered that a conservatory had been added to the house in 1891 and as a result, the convenant was broken over 100 years ago and never pursued - thereby allowing me to challenge should the covenant ever be inforced.

chappers

What does your solicitor say, it is possible that the interested party may still be alive, do they still hold an interest in the main building. I ask this because if they are still around they may want to enforce the covenant, however it seems unlikely as no action has been taken so far.
Removing covenants is notoriously slow and expensive and success is far from gauranteed, you have two options either ask the vendors to take on the liability for the covenant or take out an indemnity policy which will cover your expenses in the event of the covenant being enforced, just be aware though that should the covenant be succesfully enforced you may have to convert back to a single dwelling, you could just do nothing but then should the covenant be enforced , the cost would fall to you.

Hailstorm

Do you know who the original vendor was (most probably the company that built the property) and if they are still in business?

If the company no longer exists then the covenant is no longer enforcable and there is no problem. If the company still exists, even if it has been taken over or merged with another the covenant is still potentially enforcable.

If the covenant is still potentially enforcable the best thing is to bat it straight back to your vendor's solicitor and see what they say. It is their problem so they should be the ones who sort it out either by getting retrospective consent or an indemnity policy.

If the original vendor is still in existence do not contact them yourself as otherwise it will be impossible to take out indemnity insurance.

Entertainer

The main house is a period property as is the barn I'm buying, they are about 30 feet away from each other. It was an individual who sold off the outbuildings originally in the 50's. Now, the main house is divided into flats and according to it's title plan, a property management company is the registered owner (presumably managing the freehold.)

I'm just wondering whether an indemnity policy would work given that they or their successors are still in the vicinity? It's not like the usual situation you read about where a company built a house decades ago and the builder is now defunct/disappeared but the covenants on the house have to be covered by an indemnity policy.

jaynes2326

I have very distant bells ringing - definitely talk to your solicitor as not all restrictive covenants were correctly registered. Just from memory - your solicitor needs to do a land charges searches against the name of the restrictive covenant holder. If the restrictive covenants are not registered against their names then you can apply to the Land Registry to have them removed straightaway. Hopefully your solicitor will be aware of this procedure (once you give them a nudge!). I did have some info on this but have lost it and can't remember the exact procedure but I think that's pretty much it. Hopefully your sol is better than me!!

Hailstorm

Entertainer wrote: »

The main house is a period property as is the barn I'm buying, they are about 30 feet away from each other. It was an individual who sold off the outbuildings originally in the 50's. Now, the main house is divided into flats and according to it's title plan, a property management company is the registered owner (presumably managing the freehold.)

I'm just wondering whether an indemnity policy would work given that they or their successors are still in the vicinity? It's not like the usual situation you read about where a company built a house decades ago and the builder is now defunct/disappeared but the covenants on the house have to be covered by an indemnity policy.

It is when they or their successors are still around that you want the indemnity policy incase they do take action. When the building company has gone out of business there is nobody left who could take action so there is no need for a policy.

Have you spoken to your solicitor about your position. It sounds like an unusual and complex situation. The freeholder and management company for the flats will also have an interest in this. I think you should still be able to get an indemnity policy.

I still think the best thing is to send it back to your seller's solicitors. I had a breach of covenant on the house I recently bought. That was a lot more straightforward though. My vendors had built a conservatory and the covenant prevented any construction in the garden other than a shed without consent from the company that built the house. My solicitor sent it back to the vendor's solicitor to sort out and they came back with retrospective consent.

There is a risk with retrospective consent though. Once the original vendor has been notified you won't be able to get an indemnity policy. I didn't ask for retrospective consent. I would have been happy with an indemnity policy but my vendors went ahead and got it.

Richard_Webster

If the flats have been used as such for more than 20 years there is a case called Hepworth v Pickles that says it is too late for anyone to enforce the covenants.