Restriction on deeds - implecation

smartyd

The following restriction is on the deeds of the house and land we are hoping to buy. On talking with vendors this was made by the original owner of the land who has no financial interest. It maybe she wishes to stop any further development. Is it correct that if we bought the land and later needed to sell we could end up not being able to do so due to this restriction?
RESTRICTION: Except under an order of the registrar no transfer, lease or assent by the proprietor of the land is to be registered without the consent of June R**** of ****, ****, Norwich, NR** 8** or her personal representatives.

DVardysShadow

I would not buy without that restriction being lifted. May be she is dead, which could actually be more of a problem. When was the restriction placed?

Richard_Webster

A restriction of this sort is usually placed to protect the interest of some third party e.g. a family member who has loaned money to a young couple to buy a house and wants make sure that it is repaid or repaid if the parties separate etc.

It could be that there is some covenant in the deeds to do something positive for or make payments to this person and they will release the restriction if owners get their buyers to enter into a fresh covenant with the person. However this is unlikely to be acceptable to a buyer's mortgagee.

However the first response of a buyer's solicitor on seeing this kind of restriction is to request that it is removed on completion and the seller would normally be expected to do that.

smartyd

Not too sure as I have only seen an extract of the deeds from my solicitor. Restriction may have been placed at the time the current owners purchased the property. Property is an a farm house in about an acre of agricultural land. Since purchase the owners have had extended the farm house and had 50% of the area where the house is moved to residential status, all with planning permission from the local authority.

Richard_Webster

Your solicitor has probably already asked about it. Check with him - you only have a problem if they can't get it removed, which is not very likely.

smartyd

I've finally got further info on this issue which is slowing the purchase to a halt.

Vendor phoned to tell me that his solicitor has said there is an ‘uplift’ of 40% on the sale of any new property being built on the land. However I can't see any mention of the uplift in the deeds.

Further I don't see why I should have the uplift passed to me from the vendor when he has bought the property cheap because of the uplift. In a way I'm paying for the benefit he received on his purchase.

So I am a bit annoyed that I was not made aware of this when the property was offered for sale. And if I pull out now I will have lost a considerable amount of money.

My questions are: Should the uplift be specified in the deeds? How long does the uplift last – is there a maximum term? What is the normal next steps for a purchaser – what are my options now? How easy is it to have the uplift removed?

Many thanks

Richard_Webster

Are you expecting to build a new house on the land and sell it?

If not, then in one sense you don't need to worry because it won't affect you, but if they want to keep the restriction there so they can control future sales to make sure they get their money if anything is due to them then there could be practical difficulties if you e.g. can't get hod of them.

Your mortgage lender (if you have one) won't want the restriction there because it could restrict its ability to sell the property if you default on the mortgage.

Really this is very detailed stuff and you need to be talking to your solicitor and asking him to explain it all to you. Looks as if you are getting bits of information and then coming on this website for explanations when your solicitor is bound to have a fuller picture than we will have from what you tell us.

timmyt

smartyd wrote: »

The following restriction is on the deeds of the house and land we are hoping to buy. On talking with vendors this was made by the original owner of the land who has no financial interest. It maybe she wishes to stop any further development. Is it correct that if we bought the land and later needed to sell we could end up not being able to do so due to this restriction?
RESTRICTION: Except under an order of the registrar no transfer, lease or assent by the proprietor of the land is to be registered without the consent of June R**** of ****, ****, Norwich, NR** 8** or her personal representatives.

your seller cannot sell to you without complying, so get them to ensure they hand over an RX3 by this person on completion.