Restrictive Covenant re extension

Undercovercarrot

Hi

We are currently in the process of selling our property which we purchased in 2008. We put a conservatory on the property in 2010, which required planning permission from the LA. The planning permissions etc. were all handled by the developer who installed the conservatory.

It turns out that there is a restrictive covenant on our property which states "Any extensions, alterations or building work to the property including fences and outbuildings must be approved in advance in writing by the transferror" [the local authority.]

Our solicitor has sent a letter arguing that by getting planning permission, we have in real terms gained permission from the transferror. However, she does expect that the other side's solicitors may say no. She suggests we get insurance for this issue, which she will investigate - she says it is normally around 0.1% of the property cost (£145k)
~
Do any of you good people have experience of this and the associated indemnity insurance?

jjlandlord

If the covenant says that you must get permission in writing from the local authority before any alterations, and you got planning permission, I don't see what can be argued.

Solicitors are often keen to sell indemnity insurances.

That said, a £150 insurance will make no difference to you. But it will equally make no difference to the buyer...

Undercovercarrot

I agree. The solicitor said that if the shoe was on the other foot, she may try to argue that P/P was not sufficient....!

The joys of conveyancing, eh?!

Undercovercarrot

Just spoken to our solicitor who is really going to try to argue the point in our favour. However, insurance is £70 so we will probably go for that if all else fails!

ging84

I would completely disagree that you have permission from the local authority
you had planning permission approved, that is not the same as consent from the local authority. It is a statement that the proposal is legally permissible or is not.
The planning department have strict rules on what they can and cannot grant / deny planning permission on, and restrictive covenants with anyone, including themselves are nothing to do with it.

If your indemnity insurance would be about £145, it's by far the best option, you can argue over who should pay it, you, the person with the most to lose if the sale falls through or the least stubborn person

the other options would probably be
1 to get a specialist independent property solicitor to look into it and provide a report, this would probably cost a lot more than £145 and they're report might not go in your favour

2 go to the council to get the permission, this would likely cost more than £145 and if you were unsuccessful could making getting the indemnity insurance impossible

jjlandlord

ging84 wrote: »

you had planning permission approved, that is not the same as consent from the local authority.

Would you mind developing a bit on the difference between 'permission' and 'consent'?

G_M

Planning Permission is granted by the Planning Dept.

It is totally unrelated to permisions granted persuant to a covenant which would come from the Legal dept.

Since you failed to comply with the covenant you will need to get indemnity insurance.

Note: if you discuss this matter with the LA you will immediately invalidate any indemnity insurance.

(it would be like discussing symptoms with your doctor and being diagnosed with cancer, and then taking out health or life insurance to cover you against cancer.......)

ging84

jjlandlord wrote: »

Would you mind developing a bit on the difference between 'permission' and 'consent'?

I'm pretty sure i already explained the difference
i'm not going to try and explain if there is difference between permission and consent because that has nothing to do with that i said

there is a difference between planning permission, and consent from an interest party to build on land

would you like me to explain why (again)

jjlandlord

Allow me to have my doubts that the council will ever be able to argue that the covenant was breached considering that they did give permission.

Their departments are internal entities, which give permission on behalf of the council. IMHO the end result is that the council has given permission in writing, which is all that was required by the covenant.

G_M wrote: »

Note: if you discuss this matter with the LA you will immediately invalidate any indemnity insurance.

(it would be like discussing symptoms with your doctor and being diagnosed with cancer, and then taking out health or life insurance to cover you against cancer.......)

Not really.
The key is that if you take an insurance against a potential liability to a third party then the insurer will not allow you to alert that third party about your liability, for obvious reasons.

To carry on on medical analogies, it would be like getting an insurance against a specific disease then infecting yourself on purpose with that disease.

Undercovercarrot

I think for £70 it is easiest to pay for the insurance - we want to get the sale through, and for that amount, I would say it's worth it in my mind. jjlandlord, I do agree with your point, and I think that if we had more time I would certainly argue that (as our solicitor suggested.)

Also, part of our agreement with the developer is that they "will obtain all necessary agreements and permissions prior to development". Whilst we did not tell them of the restrictive convenant (as we were not aware of it) do they IN THEORY bear a burden of responsibility? Please note this is just conjecture!

ging84

jjlandlord wrote: »

Allow me to have my doubts that the council will ever be able to argue that the covenant was breached considering that they did give permission.

Their departments are internal entities, which give permission on behalf of the council. IMHO the end result is that the council has given permission in writing, which is all that was required by the covenant.

Go apply for planning permission to demolish the building they work in, any other council owned building to turn it into a park

see what happens when you show up with bulldozers and try and claim you have permission because the council own it and the planning department approved it