Restrictive covenants and online businesses

arthur_22

I'm buying a freehold house and it has various restrictive covenants from about 25 years ago when it was built. One says that the house must be a private dwellinghouse only and not be used to run any trade or business.

I run a business online - it's done exclusively online with no visitors, deliveries etc. My solicitor says that legally this would be a breach of the covenant, and has asked me to ring her (can't do this on a saturday obviously, just got her letter today).

So - does this sound ominous? Surely lots of people run online businesses these days what with ebay etc - are they barred from buying these types of houses? Is there anything I can do?

nearlynew

I wouldn't worry about it.

If you buy the house just carry on with your business. No one is going to know or care.

(Don't tell your solicitor that though)

sarah69696pink

Will you use it as a registerred address for your business though? Dn't know if this makes any difference?

DVardysShadow

nearlynew wrote: »

I wouldn't worry about it.

But before you commit, make sure you have a workable plan to deal with the scenario that someone comes after you. Then don't worry about it.

arthur_22

It will be the registered address in that it goes on my invoices and is the address registered for tax purposes etc.

What kind of "workable plan" would we be talking about do you think? I'm confused about these covenants and what the neighbours would actually have the right to do - sue me? Take me to court? Make me move house (I couldn't afford to rent a separate office for my business).

nearlynew

it shouldn't really be a big deal.

what sort of property is it and what is around it?

martindow

Who imposed the covenant? Developers sometimes impose covenants so that they can control the appearance of the development while they sell the rest of the houses. Once all the houses are sold they will not be interested in enforcement and the person or company who put the covenant in place is the only one who can enforce it.

olly300

arthur_22 wrote: »

So - does this sound ominous? Surely lots of people run online businesses these days what with ebay etc - are they barred from buying these types of houses? Is there anything I can do?

Do what myself and 4 of my neighbours do - ignore it.

You can have your business address registered at some where else like your accountants but for certain purposes i.e. HMRC organisations will want to contact you at your trading address which is the house.

The only people who tend to come after you for breaking covenants are the builders. If the builders have gone bust or have been taken over, and all the houses on the estate have been sold then no-one is really going to bother coming after you. Particularly as you are not having clients visit the premises, not a large amount of deliveries and you aren't keeping any stock on the premises.

The business clause in covenants and leases are to stop people setting up businesses such as health practices, garages and brothels that annoy the neighbours and cause other problems.

EDITED TO SAY- you can get the covenant removed with your solicitor's help. Obviously this will cost you money and generate higher fees for her. It will also annoy the people you are buying from as it will mean the house buying process will take longer. I would tend to tell her that it's not an issue and you don't want to discuss it.

DVardysShadow

arthur_22 wrote: »

It will be the registered address in that it goes on my invoices and is the address registered for tax purposes etc.

What kind of "workable plan" would we be talking about do you think? I'm confused about these covenants and what the neighbours would actually have the right to do - sue me? Take me to court? Make me move house (I couldn't afford to rent a separate office for my business).

I don't know what would be a workable plan, because I don't know your business. But the idea is to be able to duck if anyone threatens legal action. Don't worry about them suing you. They have the right to sue you for anything they can dream up, just worry about being successfully sued - because if it does not look successful then few lawyers will take up the case.

So all you need to do is be able to transfer those activities which give rise to evidence away from the house. Deliveries and collections are probably the main ones. If you can do your own transport to and from carriers I doubt that having your registered office there will be such a big issue.

I wouldn't start off this way, I would just have it as a plan in case the heat was turned up

arthur_22

It's a terraced house on a cul de sac of other terraces. As far as I can tell (not good at the legal speak) the developer imposed the covenants 25 years ago when they built the houses.

The thing is, there aren't any activities that give rise to evidence. I have a laptop, printer and broadband, and I'd have those anyway. The only thing that would be evidence is the fact that I'll be in the house more often.