Can I put a covenant on when I sell my house?

Liz23

Hi everyone,
I'm not sure of the correct terminology, but I moved to Australia 3 years ago. We rented out our UK property as we had developers wanting to buy it (have twice before), it has all gone cold because of the economy. We now want to sell the property and buy an investment property here. What I would like to know is if I can put some sort of clause so that if the new owners sell to a developer in x amount of years, that we get a share of the sale or is it just hard luck for me? I would be gutted if developers came along a couple of months after selling it!! We have had the house for 15 years.
Cheers!:beer:

irishjohn

I suspect such a covenant if it can be applied will do a very good job of keeping your house on the market until such times as developers are out buying land again.

I guess you will be looking for a new developer as most existing developers are sitting on parcels of land waiting for house prices to rise before they build to sell.

duchy

Would YOU buy a house with such a restriction on it ? If not then why would you expect anyone else to ?

Legally - you can - real world - it'd be madness to do so as you'd end up with the legal costs of doing it - and no buyers.

Sorry isn't feasible to have your cake AND eat it in this scenario

Davesnave

It's called an uplift clause and these usually apply to houses which have development potential within their grounds. They run for a specified time, often 20 - 25 years.

You can set the % of uplift in value you take, should the land be sold for development. Obviously, if you set it too high, people will be put off, even if they have no immediate plans to develop.

This is something you'd need specialist advice on from someone who knows the local market. Personally, I was never keen to look at properties which had uplift clauses. I don't recall seeing any recently, perhaps because of market factors.

When I sold my last house, I kept part of the garden land because I knew I could sell it for more than it was worth to a buyer as 'extra garden.' Would it be possible for you to do this?

Edit: duchy, there's no need to shout. We can hear you perfectly well.

ging84

you can do it, most likely you would need to retain a ransom strip to remain the beneficiary of a restrictive covenant
when would you plan on telling the buy that you intend put in such a restriction, after they have already made an offer or before?

it seems an incredibly bad idea, it would devalue the property, and the people most likely to be willing to go along with it, would be the ones with the intention of keeping the land untouched. So you'll of spend a load of extra money on legal fees, devalued the property, and still will never see a return on your rather selfish and unpleasant plan

Liz23

duchy wrote: »

Would YOU buy a house with such a restriction on it ? If not then why would you expect anyone else to ?

Legally - you can - real world - it'd be madness to do so as you'd end up with the legal costs of doing it - and no buyers.

Sorry isn't feasible to have your cake AND eat it in this scenario

Thanks for your quick reply Duchy. I think I would buy it as I would still be quids in. We were offered double the market value for it last time, that's why we have hung on to it, we've been very lucky so far with great tenants, but realistically there will probably be some maintenance issues before long, and it would be much easier to manage a property here :T

LadyinBlack_2

We viewed a house without realising there was a restriction like this. Needless to say we didn't buy. I can understand your motives and perhaps it's worth a try but I think you'd be very lucky to sell.

Liz23

The semi detached property is situated on the main dual carriageway from the M25 in to London, there are 3 other properties next to it who all wanted to sell to the developer. The overall land is 1 acre. It is surrounded by industrial units and a 3-storey BT building so it perfect for development. Unfortunately it's not some mansion in a leafy suburb! I must admit that it would appeal to me if I was buying, if there was a possibility that a developer would be willing to give me loads of dosh ha!ha!

martinsurrey

Liz23 wrote: »

The semi detached property is situated on the main dual carriageway from the M25 in to London, there are 3 other properties next to it who all wanted to sell to the developer. The overall land is 1 acre. It is surrounded by industrial units and a 3-storey BT building so it perfect for development. Unfortunately it's not some mansion in a leafy suburb! I must admit that it would appeal to me if I was buying, if there was a possibility that a developer would be willing to give me loads of dosh ha!ha!

a lot of mortgage companies wont touch properties with overage clauses on them, so it would also make it harder for you buyer to get a mortgage.

kingstreet

Do a search for "mortgage and overage" and see the threads on here where buyers are unable to get a mortgage due to an overage on their target property.

Davesnave

ging84 wrote: »

So you'll ....never see a return on your rather selfish and unpleasant plan

Your attitude towards newbies is somewhat inconsistent with your obviously high moral principles.

Just saying....;)