Buying a house with Restrictive Covenant on it.

Muds1

Hi All


I am buying my first property and as I started dreaming about moving into the property I hit first roadblock..


So the offer accepted, mortgage approved.. I have received a contract paper from vendor's solicitors telling us about a Restrictive Covenant on the property.


First of all - is this not a legal requirement to disclose any such information before hand ? I mean I am already into deal, paid for searches, hired a solicitor, paid to mortgage advisor and for valuation. Is this not legal obligation on Agent to disclose any such covenant ?


Secondly -


There are 2 restrictions on the property - (its a semi Dethatched house)
1. Both dwellings have shared gutters/sweage pipes etc, so we have to let other come and inspect the drains and let them fix it if needed. and if this causes any damage to my property that will be fixed to my satisfaction.


This one is understandable.


2. next one restricts us from making any external modifications without taking consent from Original owners. The exact wording here is - " The purchaser will not make any alteration to the exterior of the premises without the written consent of the vendor such consent not to be unreasonably withheld or delayed and so that no fee will be chargeable in relation to the same"


Here I do not understand,


- Why this covenant is placed ?


- If planning permission is taken for any changes can the original vendor still say NO ?


- How long will I have to wait to hear from them as it only mentions reasonable time.


- how will I find original vendors as their location might have changed.


- will this covenant affect property's selling price if I have to sell it later on ?


- I read on MSE that if character of property has changed some of the restrictions can be removed by court. This property was extended in 2010 and hence its not original as it was when covenant was placed, do I qualify to get this removed ?


- are there any more considerations to look for ?


We were really excited about the property but now, we are too confused what to do, already have spent like £2000 don't want to make any more hasty mistakes.


Any info/tip will be highly appreciated.


Thanks
M.

Foxy-Stoat_3

Who are the original owners, current vendor?

Is this a freehold or leasehold property?

New build or old property?

Muds1

Foxy-Stoat wrote: »

Who are the original owners, current vendor?

Is this a freehold or leasehold property?

New build or old property?

Original Owners (builder) sold property to someone in 1998 then it was resold in 2010 to current vendor.


Its a freehold property.


It was built in 97/98




Thanks

Alter_ego

The builder probably did it to limit development while he was selling the other(s) Only he can enforce it. I'd guess he has lost interest if all the rest are now sold.

Surrey_EA

muditmalhotra wrote: »

First of all - is this not a legal requirement to disclose any such information before hand ? I mean I am already into deal, paid for searches, hired a solicitor, paid to mortgage advisor and for valuation. Is this not legal obligation on Agent to disclose any such covenant ?
Not every agent will have seen a copy of the title before marketing a property, so they may not be aware.

Secondly -


There are 2 restrictions on the property - (its a semi Dethatched house)
1. Both dwellings have shared gutters/sweage pipes etc, so we have to let other come and inspect the drains and let them fix it if needed. and if this causes any damage to my property that will be fixed to my satisfaction.


This one is understandable.
Not anything to worry about.

2. next one restricts us from making any external modifications without taking consent from Original owners. The exact wording here is - " The purchaser will not make any alteration to the exterior of the premises without the written consent of the vendor such consent not to be unreasonably withheld or delayed and so that no fee will be chargeable in relation to the same"


Here I do not understand,


- Why this covenant is placed ?
A number of reasons. The original vendor could have had the property built on their land and wanted control over any alterations. Being part of a large development and the builders want to keep everything looking similar whilst the rest of the development is completed, to give a couple of examples.

- If planning permission is taken for any changes can the original vendor still say NO ?
Theoretically yes. Depending on how old the property is would depend on how much you need to concern yourself with this covenant. If the house was built in the 1930's I really wouldn't worry. If it is 18months old you need to look a bit harder at things.


- How long will I have to wait to hear from them as it only mentions reasonable time.
A wonderfully meaningless legal phrase! Best to ask your solicitor.


- how will I find original vendors as their location might have changed.Will not always be possible to locate them. Again, age of property/covenant will be a factor here. It is easily possible and common to take out an indemnity policy to insure yourself against any breaches of the covenant, but this will depend on the exact circumstances.


- will this covenant affect property's selling price if I have to sell it later on ?Highly unlikely. These type of covenants are not exactly rare.


- I read on MSE that if character of property has changed some of the restrictions can be removed by court. This property was extended in 2010 and hence its not original as it was when covenant was placed, do I qualify to get this removed ?

- are there any more considerations to look for ?

Hope that's of some help. From the information you've given here it doesn't sound to me like you have a lot to worry about, but check with your solicitor to be sure.

Foxy-Stoat_3

I wouldnt let it worry you then.

The covenant is there to stop the first purchaser from altering the property so that it may effect other properties value as the builder probably built the surrounding properies, as this is over 15 years old it could do with being removed as its not really relevant.

I would ask your solicitors the question as that is what you pay them for, maybe they could write to the builders, who may no longer be around, and get it removed.

Surrey_EA

Foxy-Stoat wrote: »

I would ask your solicitors the question as that is what you pay them for, maybe they could write to the builders, who may no longer be around, and get it removed.

Personally I wouldn't, either they're not around and it doesn't matter, or they do still exist and may want to be awkward and make a charge for the removal of the covenant.

If, and I would guess it's unlikely, the people you're buying from have not got written approval from the original vendor for the extension carried out in 2010 I'd be getting them to pay for an indemnity policy to cover you in the highly unlikely event the original vendor reappears in the future.

Muds1

Surrey_EA wrote: »

Hope that's of some help. From the information you've given here it doesn't sound to me like you have a lot to worry about, but check with your solicitor to be sure.

Thanks for this to the point answers ...

Muds1

Surrey_EA wrote: »

If, and I would guess it's unlikely, the people you're buying from have not got written approval from the original vendor for the extension carried out in 2010 I'd be getting them to pay for an indemnity policy to cover you in the highly unlikely event the original vendor reappears in the future.

this is what my solicitor suggested and have asked if they had approval when they extended..




Also, the address mentioned for Builders on contract has changed, I did a search on internet - they still exist but have changed address, but I am not sure if they are same but yes the names are same atleast.
I just had a thought can we in such cases send a mail to given address which in most cases will bounce.. are covered if we do this ?

Surrey_EA

muditmalhotra wrote: »

this is what my solicitor suggested and have asked if they had approval when they extended..




Also, the address mentioned for Builders on contract has changed, I did a search on internet - they still exist but have changed address, but I am not sure if they are same but yes the names are same atleast.
I just had a thought can we in such cases send a mail to given address which in most cases will bounce.. are covered if we do this ?

If you intend to extend the property further in the future I am not sure if an additional indemnity policy would be needed, or whether the policy you should hopefully get from the current sellers will be sufficient.

If it were me I wouldn't be attempting to make any contact with the original vendor/builders. As I understand it once contact has been established it then becomes much more difficult to obtain indemnity insurance.

Muds1

Surrey_EA wrote: »

If it were me I wouldn't be attempting to make any contact with the original vendor/builders. As I understand it once contact has been established it then becomes much more difficult to obtain indemnity insurance.

Good Point, as I asked, how much effort is expected from my side while searching for them, as clearly they are not on their previous address, should I search for them or its their responsibility to have mail redirects etc ?