restrictive covenant against business use.

paddyrg

Look at basing yourself from a storage unit maybe? Keep your home as a postal address only, happier neighbours...

BobQ

The term restrictive covenant can be used in different ways:
(a) the Landlord may be subject to a RC and may have simply passed this restriction on to you as the tenant.
(b) a letting agent may have a restriction in the letting agreement that applies to all properties they let.
(c) the landlord may have decided to introduce a restriction into your letting agreement alone.

(a) would probably apply to all your neighbours too if its on the same development. While this is enforceable there may be no interested party willing to enforce it. But if there is someone willing to enforce it they will have a strong case if you have breached the covenant

If it is a standard letting agent term (b) it is definitely enforceable provided the Landlord wants to enforce it.

Equally it could be a restriction that your landlord has put in (c) because he does not want the property to be used for a business in any circumstances.

From the landlord's perspective there are other factors (wear and team on the property, what his mortgage states about use, insurance of visitors etc.). This is why many residential landlords rule it out.

Whatever the Council said does not matter if the business is outside the tenancy agreement you signed. The Council can easily change its mind on planning permission if there are complaints from neighbours about deliveries.

I agree with other posts that it would be best to have an alternative premises where you can accept deliveries. This does not prevent you doing paperwork at home.

bris

Restrictive covenants can easily be removed. If the party that placed the restrictive covenant has no interest in the property any more then seek the help of a local solicitor who can petition to have the covenant removed.

This however is still only part of your problem, the LL would still have to agree to you running the business from home. His main concern however may be that he is worried about the covenant in place which may put him at risk.

Have a meeting with him face to face and see if he is happy for you to get the covenant removed, this in the long run would be to his advantage.

Aquamania

bris wrote: »

Restrictive covenants can easily be removed. If the party that placed the restrictive covenant has no interest in the property any more then seek the help of a local solicitor who can petition to have the covenant removed.

This however is still only part of your problem, the LL would still have to agree to you running the business from home. His main concern however may be that he is worried about the covenant in place which may put him at risk.

Have a meeting with him face to face and see if he is happy for you to get the covenant removed, this in the long run would be to his advantage.

I'd say the chances of getting the covenant removed/revoked would be extremely slim given that the neighbour is already complaining about the OP acting in contravention of that covenant.

Also, chances are the landlord has a mortgage on the property, and as such, most lenders would prohibit the use of property used as security for a residential mortgage to be used for business purposes (except possibly purely clerical work performed by the tenant)
The landlord would need a commercial mortage, which are usually charged at a higher rate than residential mortages and this would ultimately have to be reflected in the rent paid by the tenant.

The landlord should also seek independent legal advice over the tenancy agreement as that may be jeopardised if the landlord now permits the property to be used, even partially, for business purposes.

Also the landlord should check their insurance policy. Chances are that it too prohibits the use of the residential property from such business use as the OP is using it for. Some insurers will add business use if required, for an additional premium which again expect the landlord to reflect in the rent charged.

System

Removal isn't so simple

Discharge and modification of restrictive covenants

Once you have established that there is a restrictive covenant which might be preventing you from either building or altering a property then you should consider whether the covenant is capable of being modified or discharged under section 84 of the Law of Property Act 1925. Under this legislation, the Lands Tribunal has the power to make an order, which wholly or partially discharges or modifies the restriction.

There are three main grounds that you may rely on: -

• You reach an agreement with the person entitled to the benefit of the covenant.
• There have been changes in the character of the property or the neighbourhood or other circumstances which the Lands Tribunal consider relevant, which make the restrictive covenant obsolete; for example, the neighbourhood may have become much more built up since the granting of the original covenant
• The continued existence of the restriction would interfere with the reasonable use of the land. This only applies if the Lands Tribunal is also satisfied that the restriction: -
  1. Does not give anyone entitled to the benefit of the covenant any practical benefits of substantial value or advantage (in other words limiting or removing the covenant will not cause the person with the benefit any great disadvantage); or
  2. Is contrary to the public interest; and that in either case money will be an adequate compensation.

The big problem is the first point. It is not only the person who set the restrictive covenant that has the benefit but also your neighbours have the benefit of not having a business next door.

huggettm

Thank you for the replies, although I'm not sure all of you read the op.

I am aware that other business properties exist

It's a private landlord.
The business itself is not registered at this address.
In regards to the impact on neighbours - there is none, the council has reported that the house is still a residence and is unaffected by a desk in the lounge and conservatory.
The deliveries are not solely to our house, TNT and DPD deliver to a number of our neighbours on the estate on a daily basis as well as deliver personal items to ourselves - the deliveries have no impact on the neighbourhood other than the fact one neighbour has lied about the frequency and nature of deliveries to imply they inconvenience her (she lives up the road and is not even next door to us - just a horrid spiteful witch)

My question is if there is no impact can the covenant be imposed?
The owners of the covenant (countrywide lettings) have not contacted us personally - they contacted the council also after the neighbours complaints, after convincing the council we have done no wrong countrywide have then contacted the landlord claiming a breach of the covenant and threatening to take him to court unless we cease - which doesn't make sense to me.

Sadly at no point has the neighbour in question or countrywide actually contacted us.

Without exception every other neighbour has offered their sympathies and expressed their disgust at the actions of the complainant.

huggettm

!!!!!! wrote: »

Which is it? You get deliveries but they are not stored on site? Which means traffic has increased as you have to move them to where they are stored.

As I do not drive to and from work there is an equal decrease in traffic

lincroft1710

huggettm wrote: »

My question is if there is no impact can the covenant be imposed?

The covenant has been breached, therefore yes

The owners of the covenant (countrywide lettings) have not contacted us personally - they contacted the council also after the neighbours complaints, after convincing the council we have done no wrong countrywide have then contacted the landlord claiming a breach of the covenant and threatening to take him to court unless we cease - which doesn't make sense to me.

When he bought the house, the landlord agreed to abide by the covenant, so only he can be taken to court by Countrywide. You have not entered into any agreement with Countrywide, so they cannot pursue you directly.

Sadly at no point has the neighbour in question or countrywide actually contacted us.

Whether other businesses exist, whether the deliveries are minimal, are to every house on the estate, whether all your neighbours (bar one) don't find your activities objectionable, whether this is unfair, is immaterial.

The covenant on the house has been breached.

Your landlord may now have to go court and may end up owing money to Countrywide.

As I said in a previous post you have 2 options, either move or cease the business use.

I'm not a landlord, but if I were and this was happening to me, I would be terminating your tenancy as soon as I was legally able.

claret_mike

So take the wind out of her sails and run your business elsewhere. Whether or not it is having to impact they say it is. It stops arguments, it stops the need for further action and hassle..

I have seen these "everyone is with me" type situations. Believe it or not people do not always tell the truth when face to face.

How can you know for certain that as soon as you are out of earshot they are not saying something different? Maybe they are offering the same sympathies to the other person?

Reality is that most people don't want to end up in a he said, she said dispute so will just sympathise and then go about their business.

jackyann

You said that you were previously unaware of the restrictive covenant - have you now read it?
I have lived in places with such covenants and a lot depended on the exact wording. One of our neighbours, a GP, had taken legal advice before moving in (she worked elsewhere, but did "on calls" from home)
I wondered if it was worthwhile getting legal opinion, but unfortunately once a complaint is in, you are on the back foot. As you have realised, it is nothing to do with planning permission.
Unless the wording is ambiguous, unpalatable as it is, I think your energies are best directed towards finding somewhere else to run your business from (whether specific premises or another home without such a covenant).