Restrictive Covenant

Teabags157

Hi
I am new here so please excuse me if this or a similar question has been asked elsewhere.
We purchased a property in September for which we have obtained planning permission for a two storey side extension. The house was built in 1970 and there is a restrictive covenant dated the same time to say that any building has to be approved by the Second Vendors for whom there is only a name, no address or contact details and that they cannot unreasonably refuse it - and asking for four guineas to look at the plans!
What are the consequences if we cannot track the second vendors down and we go ahead and build?
Thanks
TB

Rollinghills

I thought I'd mention sometimes these covenants have an expiry date written somewhere, have you checked that it is still applicable?

No advice except we are buying a house in breach of a covenant and I don't like it, I think we will go ahead with it if vendor pays for indemnity insurance but the downside is exactly that: some buyers may not like it, and you may have to pay for indemnity insurance when you come to sell the house.

Hoploz

We had this on our old house. Covenant stated permission was required from the builder for alterations. When we were planning our extension I was aware of it but as it was from 1958 I thought it was highly unlikely to be enforced. All the neighbours had extended and hadn't asked permission. Quite likely he could be dead 50 years after the covenant was written. So I thought no more about it.

When it came to selling I had to buy an indemnity policy, but it didn't cause any problems for me in the selling process.

Land_Registry

The worse case scenario is that someone enforces the covenant against you and you have to remove the extension and/or pay compensation - this is where the indemnity policy often comes in as others have referred to.

There are a number of issues you can consider but it is always best to rely on your solicitor's advice especially as I have read in this forum and others that too much digging around the covenant can make obtaining insurance harder.

You already appreciate that the covenant is 'old' and this in itself may make enforcement unlikely. It was also imposed it seems by the original builder and involved a 'second Vendor' and as such it is important to read and understand the covenant clause to understand who the covenants are actually in favour of e.g. 'the Vendor and successors in title' as this will give you an indication of who now has the benefit of the covenants as well.

I mention this simply because restrictive covenants are rarely for the benefit of an individual/company although they can be as other posters have suggested. Most are imposed for the benefit of land owned by the seller at the time and the benefit 'runs with the land' so does not disappear simply because the seller at the time has ceased training or cannot be traced.

The easiest way to explain it is that if you have one large area of land and the seller develops it and splits it into say 40 plots then depending on the wording of the covenants, the benefit can pass to all 40 subsequent landowners of each plot. So the benefit could now lie with each and everyone of your neighbours if they formed part of the original development.

Such covenants were often (and still are) imposed so as to 'protect' the development whilst it is being sold. The developer does not want new owners changing the layout of their plots and affecting how they have in essence laid out the development and put it 'on show' for sale. Often there is a timeframe mentioned simply because they expect to have sold all the plots within a certain timeframe but that is not always the case.

That could be a good thing as it sounds as if many have already extended and in essence breached the same covenant, which will often be imposed on each and every plot sale. That does not remove the risk of enforcement but it may lessen the likelihood of someone seeking to enforce it.

So in essence the covenants are still relevant and they could be enforced. Trying to trace the original developer and perhaps even the 'second vendor' may be a fruitless exercise. An indemnity policy may be the easiest and cheapest way forward but as mentioned it is your solicitor you should rely on here.

Here's another recent thread on a similar subject

Teabags157

Thanks for your responses.

The RC refers to the Second Vendors who we think must have owned at one time the properties to the North West of our property. These are now housing association owned. Would we therefore need to contact the housing association?

TBH we are thinking that we will go ahead with the extension without contacting the Second Vendors.

Can insurance be taken out now or do we have to wait until the extension has been in situ for a year?

Thanks.

Land_Registry

Teabags157 - it is the wording of the covenanting clause which should help explain in what direction any investigations should go.

The insurance side is not something we would cover but I suspect you would insure from the start rather than after the event.

There are others on this forum who are better placed to advise re this aspect - Richard Webster being one

CathA

If any of the neighbours have built an extension, why don't you knock on their door and ask them if they had to contact the second vendor? Might be worth a try?

patman99

What would happen if you were to add a covenant of your own stating that the owner has the right to construct without hinderance any extension or new building ?.

stator

patman99 wrote: »

What would happen if you were to add a covenant of your own stating that the owner has the right to construct without hinderance any extension or new building ?.

Wouldn't have any effect on existing covenants.

Indemnities can only be taken out if the "second vendor" / covenant owner is unaware of the development. They can not be taken out if you ever ask for permission to do it, as that increases the risk of them being enforced.
An indemnity would definitely be useful if you sell the house, as it's something that the solicitors will highlight.

Hoploz

Indemnity policies can only be taken out later on, I think. I'm not sure if this one would be the same, but I know an indemnity for lack of building regs can only be taken out a year after the work has been done. I would imagine it'd be the same for the permission to build thing - it would make sense as the most likely time someone would notice or enforce the covenant would be when it is first being done.