Restrictive Covenants

*Rainbow*Warrior*

Can anyone advise me on the law in this area please? We have a restrictive covenant on our property dating back to when it was built in the 1970s. The original builder has gone bust (years ago) and the covenant is now 'owned' by Redrow. As I understand it they ask for a fixed amount to give permission for extensions etc. I think it's more a money-making exercise than anything else as the estate was completed over 40 years ago and Redrow themselves had nothing to do with it.

However, I am interested in actually buying out the covenant. I have been in touch with Redrow about a month ago - with a follow up email sent earlier this week - with no response.

Where do I stand? Do I have any rights at all or is it entirely up to Redrow's discretion if they choose to respond or to allow me to buy out the covenant? Just feel really helpless here as I don't know if I have any rights at all on my side? How long is it reasonable to wait for a response?

MX5huggy

I would ignore it at your own risk.

Redrow arn't intrested in your extension, they(or the actual builder) just wanted to maintain a tidy estate while they were selling the houses.

*Rainbow*Warrior*

MX5huggy wrote: »

I would ignore it at your own risk.

Redrow arn't intrested in your extension, they(or the actual builder) just wanted to maintain a tidy estate while they were selling the houses.

Thanks but I'm not sure what you mean? Ignore what?

I want to buy out the covenant - not for myself, but because I believe it will hinder the sale of the property (by making it less attractive to potential purchasers).

The previous owner (and by the looks of it the entire street) did ignore it, as they have all built an extension of some sort - but once it comes to selling, the solicitor spots the covenant. The previous owners had to pay a retrospective fee to Redrow when they sold the place to us. We WERE put off by the covenant but for reasons I won't bore you with, we went ahead anyway. The market is VERY slow here and I want to remove anything that may make the place less attractive to a buyer.

MX5huggy

I meant ignore it and build an extension.

go_cat

Any potential buyers could have bought indemnity insurance against highly unlikely action against them however now you have notified them I doubt they would be able to do this
Tbh after this period of time I would have left it !

*Rainbow*Warrior*

go_cat wrote: »

Any potential buyers could have bought indemnity insurance against highly unlikely action against them however now you have notified them I doubt they would be able to do this
Tbh after this period of time I would have left it !

Thanks for your input, but I think you're missing the point.

Firstly, there are no new buyers as yet so I haven't notified them.

Secondly, it's not up to me to notify them anyway. The point I'm making is that people have happily built extensions on this street for the last 20 or 30 years without bothering to get consent - however, the minute they come to sell the property, the conveyancing solicitor picks up that there is a covenant and the sale can't proceed unless it's sorted.

We bought this house 5 years ago and at that point the previous owners paid a retrospective fee to get permission for their old extension. THEY got in touch with Redrow, not me. THEY and/or their solicitor got the updated details about Redrow owning the covenant put on the deeds, not me.

No-one would be able to get indemnity insurance because it is already noted on the deeds that Redrow have an interest - and this was done by the previous owners and their solicitors, not me.

All I want to know is how to fix the problem. If anyone has any info about whether it's feasible to buy out the covenant, and if I have any rights to expect a response within a certain time, I would appreciate the advice.

It's not a major problem as I understand it - Redrow (as has been said) don't care about what the estate looks like and I'm sure will allow any extensions required for a nominal fee (I believe it's about £100 for an advance approval and about £150 for retrospective approval). The problem I have is that I think buyers will not understand this and will be put off by the fact that there is a covenant at all.

Richard_Webster

If the extension has a retrospective consent what is the issue? It is only if you or your buyers want to build another extension hat the issue comes up again.

Most estates built since say the 1960s will have similar covenants imposed on them so it is very common. People happpily build extensions in ignorance of the covnenats because they forget what their solciitor told them when they bought or confuse it with te need for Planning and/or Building Regulation consent. In most cases it is simply dealt with by getting a Restrictive Covenant Indemnity Policy (or if the builder is easily contactable and the solicitors know that the consent is cheaper than the cost of the policy) they get a retrospective consent.

I think you are worrying unnecessarily about the point.

*Rainbow*Warrior*

You may well be right that I am worrying needlessly, but nevertheless I AM worrying. I know some buyers are not bothered about covenants, but some are, and I want to remove any possible obstructions to the sale of the property.

Do builders routinely release covenants (for a price) or is this likely to be something non-negotiable?

Richard_Webster

I have never encountered a case where a builder has completely "released" a covenant in respect of an ordinary house.

They might consider it but would want a lot of money for their trouble - they would take the view that if you were silly enough to approach them then they might as well make money out of it. You would run up quite a lot in legal costs messing about with it too! My guesstimate would be around £5K.

In the real world the average buyer only finds out about the covenants half way through the transaction and at that point he either doesn't care at all because he has no intention of building an extension or when told by his solicitor that he will either have to approach the builder for a consent before he builds, or get an indemnity policy costing perhaps £100-£200 when he sells, he takes the view that he will worry about it when the time comes.

I deal with sales and purchases all the time and there are very few buyers who worry about the existence of such covenants.

There are all kinds of random things that occasionally put buyers off. I think Feng Shui is a load of rubbish but there will be a few folk out there who will be really concerned that possibly your house doesn't meet Feng Shui ideals. Is the house a terrace or a semi - don't buy it because if you get an Exclusive Brethren buyer he won't want it. See what I mean - you really are worrying about a fairly unlikely scenario.