Flat purchase .. restrictive covenant

foolishboy

I'm considering an offer on a flat and grabbed the entry from the land registry website as matter of course.

Couple of entries refer to restricted and mutual covenants, any idea what these mean? Or is this a job for the conveyancer?

B: Proprietorship Register
This register specifies the class of title and
identifies the owner. It contains any entries that
affect the right of disposal.
Title absolute

2 (06.10.1995) RESTRICTION: No disposition by a sole proprietor of the land (not being a trust corporation) under which capital money arises is to be registered except under an order of the registrar or of the Court.

and...

This register contains any charges and other matters
that affect the land.
1 A Transfer dated 1 December 1956 made between (1) xxxxxx and (2) xxxxx contains restrictive covenants.
NOTE: Original filed.
2 (06.10.1995) A Deed dated 20 September 1995 made xxxxxx and xxxxx contains mutual covenants.

EA said something about a covenant relating to permitted development. It's a maisonette (so has it's own entrance) but previous owner has sold off the garage so it's without parking. My idea is to build a driveway in front of the entrance which is only overlooked by this 1st floor flat - the one I'm interested in.

Thanks!
Adam

Richard_Webster

2 (06.10.1995) RESTRICTION: No disposition by a sole proprietor of the land (not being a trust corporation) under which capital money arises is to be registered except under an order of the registrar or of the Court.

This is a standard tenancy in common restriction that simply means that at least two people need to sign to sell the property. Won't affect you at all as your solicitors will make sure that at least two sellers sign.

This register contains any charges and other matters
that affect the land.
1 A Transfer dated 1 December 1956 made between (1) xxxxxx and (2) xxxxx contains restrictive covenants.
NOTE: Original filed.
2 (06.10.1995) A Deed dated 20 September 1995 made xxxxxx and xxxxx contains mutual covenants.

The only way anyone can tell you is by looking at copies of the deeds in question. Speculation is totally pointless.

If it is a maisonette I would normally expect it to be leasehold - so you did get a copy of the leasehold title for the maisonette and not the freehold title for the whole building didn't you?

You will also need to look at the lease to see what restrictions are in it and that costs a further £24 to get and will be posted from the Land Registry. Is the area where you want to put the driveway even included in the lease?

EA won;t have a clue about this level of detail so no point asking him. Sellers often don't understand their own leasehold documents so often you have to get a solicitor to explain them to you.

foolishboy

Thanks Richard, much appreciated that you took the time to respond.

When you say I need to look at copies of the deeds which deeds to you refer to?

EA said the property was freehold (which sounded unlikely so taken with a pinch of salt) .. how do I tell what I'm looking at is the Freehold or Leasehold document?

Under property register section it says:

"1 (23.10.1945) The Freehold land shown edged with red on the plan of the above Title filed at the Registry and being xxxxxx."

I guess first thing is to find out whether it's leasehold or freehold and go from there.

Thanks again,
FB

Richard_Webster wrote: »

This is a standard tenancy in common restriction that simply means that at least two people need to sign to sell the property. Won't affect you at all as your solicitors will make sure that at least two sellers sign.



The only way anyone can tell you is by looking at copies of the deeds in question. Speculation is totally pointless.

If it is a maisonette I would normally expect it to be leasehold - so you did get a copy of the leasehold title for the maisonette and not the freehold title for the whole building didn't you?

You will also need to look at the lease to see what restrictions are in it and that costs a further £24 to get and will be posted from the Land Registry. Is the area where you want to put the driveway even included in the lease?

EA won;t have a clue about this level of detail so no point asking him. Sellers often don't understand their own leasehold documents so often you have to get a solicitor to explain them to you.

Richard_Webster

EA said the property was freehold (which sounded unlikely so taken with a pinch of salt) .. how do I tell what I'm looking at is the Freehold or Leasehold document?

The Land Registry entries will say whether they are freehold or leasehold. If leasehold then details of the lease will be given - its date, the names of the people who were the original lessor and lessee (often nothing to do with who owns the freehold and leasehold titles now) and the length of the term e.g. "99 years from 25th March 1989".

At the end of the freehold title registers you should see a schedule of leases giving details of the leases granted in respect of that freehold title.

How many flats in the block?

To explain the possible situations lets just take the simplest factual situation:

Building looks like a detached house but is actually two maisonettes. There are a number of possible combinations:

1. Most common: One freehold title for whole building and gardens etc. 2 leasehold titles - one for each flat, which may also include separate bits of garden for each flat Freeholder entitled to collect ground rent and enforce leaseholder's obligations. Freeholder may or may not be responsible for insurance and structural maintenance subject to recharge to lessees.

2. Similar but only one leasehold title because freeholder lives in/lets out short term the other flat and has never bothered to create a lease of it.

3. Occurs with Laing Maisonettes and a lot on Tyneside: Two freehold titles and two leasehold titles. In this case you get a longish lease of the flat you "own"/live in but you also own the freehold of the other flat so you each are each other's landlord and can enforce the obligations against each other. This looks complicated and confuses people, but does work and has the advantage that you don't have an outside landlord.

4. Much rarer but does happen: Two separate freehold titles one for each flat and no leases at all. Unless(for some reason) in the Scarborough area, this situation is virtually unmortgageable and is to be avoided, because it is not possible to enforce obligations like maintenance and insurance against freehold neighbours in the same building just because they are neighbours, if there is no deed signed by all concerned agreeing to that. You can never get them all to sign every time a flat changes hands so scheme is hopeless.

Obviously I've simplified it - if there was a biggish estate the freehold could include lots of similar flats/maisonettes and doesn't need to be confined to just one building.

foolishboy

..starting to get it now.

If the status is on the land register doc then it's freehold.

"A: Property Register
This register describes the land and estate
comprised in the title.
WEST SUSSEX : ARUN
1 (23.10.1945) The Freehold land shown edged with red on the plan of the above Title filed at the Registry and being xxxxxxx."

Where xxxxxxx is the full address of the flat in question. There is no mention of lease on the document.

The building looks like 2 semi detached houses from outside but actually comprises 4 maisonettes. Mine has the garden too - apparently - where would that be on the registry entry?

Totally get your point about freehold in flats being undesirable - mortgage company doesn't seem to have a problem and I told them what the EA told me - that it was freehold.

thanks,
Adam

Richard_Webster

"A: Property Register
This register describes the land and estate
comprised in the title.
WEST SUSSEX : ARUN
1 (23.10.1945) The Freehold land shown edged with red on the plan of the above Title filed at the Registry and being xxxxxxx."

Where xxxxxxx is the full address of the flat in question. There is no mention of lease on the document.

OK so no mention of a lease anywhere.

Is the flat described as a ground floor or first floor or does it say something like "as to the area tinted pink(/blue etc ) only the ground/first floor is included"? Typically with the title to a flat with say a piece of garden the whole area will be edged red and the part of the building involved will be tinted pink or blue to indicate that only a particular floor of that area is in the title.

If there is this sort of indication then you have freehold flat and I would run away very quickly indeed. You will be going into a minefield out of which you will find it very difficult to extricate yourself. Is the flat significantly cheaper than similar flats? If so, that's why. If not you are being royally had. Nobody will be able to get a mortgage on it.

If there is no limiting reference then it could be that the freehold of the whole building (or at least of what would like one semi) is in the title including the other flat.

foolishboy

It says:

"NOTE: As to the land tinted blue on the title plan only the first
floor flat is included in this registration."

As you guessed the plot shows blue for the footprint from the flat's side of the building and a red outline showing the whole land including garden.

Is this the limiting reference you ask about:

"3 The Transfer dated 1 December 1956 referred to above contains a provision relating to boundary structures and is expressed to include one half in depth of the joists between the floors of the flat and the ceilings of the flat below."

It requires 'modernisation' (e.g. it's a state) but with minimal changes it would be a keen investment - if it weren't for the freehold complications.

So far my mortgage broker and the underwriter haven't expressed any concerns about the freehold but this could well be an oversight and I'd rather bail now than later.

So you're opinion would be to run as fast as my legs would carry me? Push for further discount to cover complications? Or just not worth the hassle?

Thanks again so much .. I'm learning lots along the way, this is fun in a perverse way.

FB

Richard_Webster wrote: »

OK so no mention of a lease anywhere.

Is the flat described as a ground floor or first floor or does it say something like "as to the area tinted pink(/blue etc ) only the ground/first floor is included"? Typically with the title to a flat with say a piece of garden the whole area will be edged red and the part of the building involved will be tinted pink or blue to indicate that only a particular floor of that area is in the title.

If there is this sort of indication then you have freehold flat and I would run away very quickly indeed. You will be going into a minefield out of which you will find it very difficult to extricate yourself. Is the flat significantly cheaper than similar flats? If so, that's why. If not you are being royally had. Nobody will be able to get a mortgage on it.

If there is no limiting reference then it could be that the freehold of the whole building (or at least of what would like one semi) is in the title including the other flat.

Richard_Webster

"NOTE: As to the land tinted blue on the title plan only the first
floor flat is included in this registration."

As you guessed the plot shows blue for the footprint from the flat's side of the building and a red outline showing the whole land including garden.

That's the note I suggested would be there.

Is this the limiting reference you ask about:

"3 The Transfer dated 1 December 1956 referred to above contains a provision relating to boundary structures and is expressed to include one half in depth of the joists between the floors of the flat and the ceilings of the flat below."

No, I hadn't thought about that, but it means that the property was subdivided by freehold transfer in 1956 by some solicitors who really should have known better.

So far my mortgage broker and the underwriter haven't expressed any concerns about the freehold but this could well be an oversight and I'd rather bail now than later.

As far as I know only RBS/Nat West will lend on freehold flats (outside Scarborough where Yorkshire BS will). However they require "a scheme of mutual covenants." This means that there is a legal means of compelling the other flat owner to enter into a deed of covenant with the owner of this flat whereby they each agree to maintain and insure their part of the building. There are two problems with this:

1. Even if you have such a scheme where there is legally binding obligation on the other flat owner to sign such a deed, actually getting him to get off his backside and sign when someone else is selling their flat and he doesn't understand why he should be involved, can be difficult. Being beholden to a third party when you want to sell a property is always dangerous.

2. If the flats were first sold of in 1956 it is very unlikely that they devised such a scheme, or if they did that it has been kept up. There needs to be a direct deed of covenant in existence between the present owners of the two flats. You won't find these on the Land Registry I'm afraid and their existence or not would only become apparent when your solicitors investigate further.

Not a hope of the EA understanding of any of this I'm afraid so no point asking.

I don't think I can help much more at the moment. I'm off tomorrow to replace cloudy Eastleigh with apparently just as cloudy Vendee in France so MSE won't see me for a couple of weeks.

foolishboy

Thanks again Richard, happy travels!

In the meantime I need to find out more about whether we have a chance of getting finance before getting solicitors involved in taking it further.

Cheers!
FB