How to buy indemnity insurance for breach of restrictive covenant

get_jo

Hi

we have a restrictive covenant on our Victorian house requiring us to maintain a boundary fence where our property adjoins the road. The covenant was put there originally by the builder, and therefore I do not believe there is an existing beneficiary.

We want to remove the front wall to allow parking on the front garden. Other houses in our road, at least one of which is subject to the same covenant, have removed the boundary fences / walls to allow vehicle access.

Other than ignoring the covenant (which is tempting, but I'm worried it would adversely affect the value of the house), I understand there are 3 options:

1. find the beneficiary and get them to agree to waive their entitlement (will not be doing this as I doubt there is a beneficiary, and in any event, it will be time consuming, money consuming and can invalidate other options)
2. take it to tribunal or similar to remove the covenant through the legal system (will not be doing this as it's expensive, time consuming & generally a pain in the butt)
3. get an insurance policy to insure me against anyone suing me for breach of covenant.

I have been looking into insurance, and the three insurers I've managed to contact so far have advised that they only deal with solicitors.

Some questions:

• Is that normal?
• I don't understand why I need a solicitor to get me an insurance policy - can anyone sed any light?
• Are there any insurers who deal with householders direct?
• If there is no alternative, can anyone suggest how much I should expect a solicitor to charge?
• Should I just ignore the covenant? If so, what's the downsides?

Thanks very much to anyone who can help

Doozergirl

Indemnity insurance is only available from solicitors. Cost depends on the price of your house but no more than a couple of hundred £.

Personally, I'd ignore it for the moment; if the house is over 100 years old and otherwise freehold, I doubt anyone is ever coming to get you. Buy indemnity insurance if it's picked up by a buyers solicitor when you eventually go to sell.

chris_m

How about a lateral thinking solution? Replace the wall with a fence that's made in two halves and hinged at the ends - whether you close them or not, you've got a fence ;-)

timmyt

get_jo wrote: »

Hi

we have a restrictive covenant on our Victorian house requiring us to maintain a boundary fence where our property adjoins the road. The covenant was put there originally by the builder, and therefore I do not believe there is an existing beneficiary. unless they no longer exists and the covenant was personal to them, it will pass usually to your neighbours

We want to remove the front wall to allow parking on the front garden. Other houses in our road, at least one of which is subject to the same covenant, have removed the boundary fences / walls to allow vehicle access.

Other than ignoring the covenant (which is tempting, but I'm worried it would adversely affect the value of the house), I understand there are 3 options:

1. find the beneficiary and get them to agree to waive their entitlement (will not be doing this as I doubt there is a beneficiary, and in any event, it will be time consuming, money consuming and can invalidate other options)
2. take it to tribunal or similar to remove the covenant through the legal system (will not be doing this as it's expensive, time consuming & generally a pain in the butt)
3. get an insurance policy to insure me against anyone suing me for breach of covenant. you need to disclose to them that you intend to go ahead and breach it, so the premium will be a lot higher...if they will insure at all, you will find one that will

I have been looking into insurance, and the three insurers I've managed to contact so far have advised that they only deal with solicitors.

Some questions:

• Is that normal? yes
• I don't understand why I need a solicitor to get me an insurance policy - can anyone sed any light? you heard it from the horse's mouth
• Are there any insurers who deal with householders direct? not sure, doubt it as they need to be presented with the legal position by a lawyer, to then decide if they want to insure
• If there is no alternative, can anyone suggest how much I should expect a solicitor to charge? just to get insurance....unlikely any will touch it
• Should I just ignore the covenant? If so, what's the downsides? being sued

Thanks very much to anyone who can help

good luck OP

Richard_Webster

There is always a risk, but in the circumstances you quote it would generally be considered to be a very small one.

The normal way forward would be to go ahead and see what happens.

Lots of people do this kind of thing blissfully unaware of the covenant even though it was explained to them by their solicitor when they bought - they worry about Planning etc and once they establish they don't need planning permission for something they are going to do, or they get the permission, it never occurs to them that they are breaking a covenant. So please be assured it is very very common for us to be arranging policies for people selling who have broken covenants and hadn't realised this.

The worst case is that somebody will come along and want the wall rebuilt.

However, if they don't go to court fairly soon after the breach has been committed the courts will refuse an injunction to have the wall reinstated (because of delay) and they will be left with the remedy of damages. The court would then have to decide whether the covenant holder had incurred any actual loss as a result. It is possible they could prove real loss, but in most circumstances it is pretty unlikely, so they might get purely nominal (joke) damages or maybe low hundreds, so their solicitors would probably advise them to do some kind of deal, to avoid the cost of the proceedings.

When you sell a buyer's solicitor will want an indemnity policy because he will want to protect his mortgage lender who take a very risk averse position on all these kinds of things. Once the breach is a year old solicitors can arrange these polices fairly easily.

As TimmyT says it is unlikely that a solicitor would arrange a policy for you as a one-off. Most of us are only authorised under Financial Services legislation only to arrange insurances that are ancillary to our main work so we can normally only do them for our clients and their purchasers in a conveyancing transaction.

get_jo

Thanks very much to all - very useful. Especially to Mr. Webster, extremely helpful detail, thanks so much

Suzy_M

Not been mentioned yet - and you may already be aware but you will also need to apply to the council for a vehicle crossover (dropped kerb) from the public road.

get_jo

Suzy_M wrote: »

you will also need to apply to the council for a vehicle crossover

Thanks, yes I have that one in hand - it was just the covenant that was worrying me.

It may also be worth noting for anyone reading that as I live on a classified road, I also need planning permission for a vehicle entry point.

By the way, chris_m - my fallback position will definitely be a hinged fence. Not to be confused with a gate of course... it will most definitely be a hinged fence

Thanks all again :T

Emranio

Hi, we are in a process of buying a house, Its got a good size plot and our thoughts were to extend it as we need to meet our demands. However, we've had a look at the existing deeds and its has the covenant below written in it. It was made between the original developer and the original buyer (the property has not been on the market since it was first purchased in 1950).
not to dig excavate or remove any clay sand gravel or other material from the said land or make any excavation thereon for the purpose of making foundations to any building.

What would happen if we ignore it and continue to extend / build
Should i ask for insurance from the sellers?
can anyone enforce this covenant?
I think the original developer and buyer has passed away, can this covenant be transferred? it makes no reference to a transfer in the deeds.
Kind Regards