Restrictive Covenant

mittel

Hello All, I am new here and don´t know if I am doing this right.

I am in the process of purchasing a property which has the following covenant " No more than one house should be erected on the land thereby conveyed coloured red on the plan".

The covenant was made in 1924.

On the land indicated there are two houses both within thier own boundaries and both built around the 1950s,the house I am purchasing and the neighbours.

My solicitor has requested a Indemnity Cover Policy from the vendor.

My question is, "What could be the worst case scenario?"

Many thanks

G_M

Worst case?

One of the houses (the 2nd to be built) has to be knocked down.

housebuyer2

You should caveat that reply by saying it is also incrwdibly remote scenario....

mittel

Many thanks for the replies however, I was informed that there was a 20 year rule and that the benefactor of the covenant can only claim for any financial loss he/she can prove that they are owed. These properties are part of an established estate.

Any ideas are very welcome.

Many thanks

G_M

housebuyer2 wrote: »

You should caveat that reply by saying it is also incrwdibly remote scenario....

This is true, but the OP asked "What could be the worst case scenario?"

I was informed that there was a 20 year rule

I don't believe so. Informed by who? I have a covenant (from 1878) granting me a right to water across my neighbour's land which I rely on - without this I would have no water supply!

the benefactor of the covenant can only claim for any financial loss he/she can prove that they are owed.

I don't believe so. A covenant is there to allow, or restrict, something. Loss does not come into it.

Similarly a Right of Way in a covenant can be enforced whether or not any financial loss or gain insues.

mittel

Many thanks G_M.

So in basic terms, albeit remote, someone can demand that one of the houses (the one built most recently)must be taken down?

In this scenario will an Indemnity Policy cover me for all associated legal costs and the cost of rebuilding / buying a new property?

Regards

mittel

In response to "I don't believe so. Informed by who? I have a covenant (from 1878) granting me a right to water across my neighbour's land which I rely on - without this I would have no water supply!"

I have come across this
"breach of a 1835 covenant not to build more than one house on the land. In general, if a covenant has been openly and uninterruptedly breached for 20 years then a waiver is presumed (Hepworth vPickles 1900 – conveyancers in the audience refer to Emmett 19.082). If the house was over 20 years old then you could safely do without a policy."

and this
"Consents, acquiescence and abandonment
9.Thirdly, long acquiescence in a breach of covenant will give rise to an inference

that the persons with the benefit of a covenant have granted a licence or that the

covenant has been abandoned. So, where a covenant in a lease contained

preventing the erection of buildings other than single storey villas, but high rise

blocks had been erected on parts of the land over a period of over 45 years, it

was held that the whole of the covenant had been abandoned and could not be

enforced by the landlord so as to prevent the erection of further high rise blocks:

see
A-G for Hong Kong v Fairfax4, PC applying the long-established principle in


Hepworth v Pickles"
Regards

G_M

Ah- then you may be right...

the covenant itself is not subject to a 20 year enforcement period, but a breach lasting 20 years might invalidate the covenant.

I shall bow out - this requires more specialist legal advice than I can offer!

Blake Lapthorne solicitors

conveyancing confidential

mittel

Thanks again G_M.

That is why I am in this dilemma, because both solicitors, mine and the vendors have been "arguing" about a Indemnity Policy.
Worst still they don´t seem to be aware of the Hepworth v Pickles case.

I must add that they don´t seem to be on thier own, this from your own "home" web page -

Dealing with a request for 'the usual policy' from a firm

of conveyancers recently reminded me of the case of


Hepworth v Pickles


This case has had more comebacks than Sinatra, but

is still, as far as I know, good law.

The case was reported in 1900, and concerned a sale

of a shop which had been used continuously and

openly with an off licence for the sale of alcohol for 24

years. After exchange a restrictive covenant was

revealed which prevented that use, and the purchaser

tried to rescind the contract.

It was held that in those the circumstances the long

course of usage in breach of the covenant was such as

to show that the usage had been and is now lawful.

The case is often cited to argue that where a covenant

has been openly and continuously broken for at least

20 years, it is deemed to be waived.

So, it is worth remembering this case the next time you

are asked to fork out for indemnity cover, it may save

your client the expense.

I mention this because, although well intensioned, your initial reply scared the living daylights out of me and I was al ready to pull out of the sale.

It was only the mention of this case by Mr Richard Webster that I continued to look for more information.

Well, I will now inform my solicitor on Monday, see if he´ll offer me a discount on his fees !!!

blackshirtuk

When you see them take a print out of the cases mentioned, they may not know!

mittel

That is my point, surely they should know, or if not make enquiries. I could have easily walked away at great financial expense and upheaval for both parties involved, my family and the vendor´s.