Restrictive covenants: who is the beneficiary?

daKlone

I wonder if someone can help me with this?

There are a number of restrictive covenants against my property that prevent a range of activities from building a shed, converting the garage and running a business to not keeping poultry and not hanging out laundry on certain days.

The document in question makes reference to three businesses which are all now dissolved.

Company A is referred to as "the Transferor", company B as "the Vendor" and company C as "the Transferee". There is also a party called "the Guarantor" who appears to be the owner of company C but is referred to in person rather than as the owner.

Does anyone know what the difference is between a Transferor and a Vendor? They seem to mean the same to me!

Most of the clauses in the covenant refer to those two companies.

My question is this: who is the beneficiary?

Some of them have what I think are clear beneficiaries; there are some that grant right of access to areas of my land to my neighbors, for instance. It's less obvious for the more general ones like the sheds and garages etc.

ging84

I expect if the vendor and transferor are referred to separately then the developer never own the land outright that it built on.
Properly worded covenants should be for the benefit of the land and therefore a beneficiary can only be a land holder and this should pass with the land. However when covenant refers directly to a party either by name eg mcwillies or the developer/vendor it casts doubt on the beneficiary being future landholders. Sometimes it is obvious that it wouldn't other cases it would like like it should. It is a complicated area of law and the specific wording of the covenant in the full context of the transfer agreement are imporrant.

daKlone

One part says

"The Transferee hereby covenants with the Transferor and the Vendor and each of them and the Vendor hereby covenants with the Transferor for the benefit of the whole of the land and premises comprised in the Transferor's said XXXX Estate and every part thereof to perform and observe the restrictions and stipulations specified in Part I of the Third Schedule hereto"

Part I of the Third Schedule says in one of it's clauses, for instance:

"Not to use any garage erected on the property transferred or permit the same to be used for any purpose other than as a private garage for the use of the occupiers of the dwelling to which it belongs"

ging84

Looks fairly clear in that case that anyone owning any part of the estate is a beneficiary of those covenants.

daKlone

Ah, that makes some sense.

Pretty tricky to negotiate with a whole estate for the release of the covenants!!

Any idea what I can do?

Slinky

What are you planning on doing and has anybody on the estate already done it?

daKlone

The idea is to convert our two-bedroom townhouse into a four-bedroom house, by

1. Converting the internal garage (beneath our current kitchen and front bedroom) into a kitchen.
2. Convert the car port (underneath our current living room and back bedroom) into a living room.
3. Erect fence around rear of property to enclose.

Issues:

1. Covenant preventing use of garage as anything other than a garage.
2. Covenant requiring access be granted through car port to neighbours & another preventing changes to the external appearance of the property.
3. Covenant preventing the erecting of any fence.

Has anyone else done this?

Yes, our neighbours have erected fences and converted their garages. I don't know if they have the same covenants on their properties however.

Land_Registry

ging84 has covered it for you re how the benefit will invariably pass with the land
. So if the original 'estate' is now 40, 50, 60 houses then each could have the benefit - the Transfer presumably defines the 'estate' in some way.

Whilst I cannot advise on the best way forward experience suggests that where you are dealing with a number of potential beneficiaries the idea of trying to secure a formal release is unlikely to provide the end result you crave either because not all will want to be bothered with the process or you simply cannot be sure that you have identified all of the benefiting landowners. As a result it is very rare to secure a total release/extinguishment and as such a half measure would not really solve the issue for you.

It is often safe to assume that if your neighbours' properties were all built by the same developer then they are likely to all be affected by and have the benefit of the same covenants. You can always check onine if you want to be sure although at this stage it is probably legal advice you need.

Having read other forum threads on similar matters the important part is to understand the risks involved should you breach the covenants. Whilst trying to identify the likely number of potential beneficiaries is important it is really assessing what options are available to you around the risks involved and what may or may not happen should you proceed and someone challenges you on the breach.

daKlone

Who would enforce it though? Since all the original businesses have ceased trading does it fall to the County Council to enforce covenants?

Would just one or two beneficiaries mounting a challenge be enough or would they all have to complain?

martindow

daKlone wrote: »

2. Covenant requiring access be granted through car port to neighbours

That sounds a problem. Are your proposed changes going to block access for your neighbours?

daKlone

Yes it will, but we've lived at this address for almost 10 years and I've never seen any of my neighbours use it.