Buying a plot of land with restrictive covenants

WisdomJackPowers

Hello

I'm looking to buy a plot of land which has two restrictive covenants attached to it. The first covenant dates back to 1929 and does not present such a concern to me. The second was applied to the land when it was sold in 2008 and seems more problematic.

Looking into historic title deeds I can see that the land was once part of a larger plot. This plot was an end of terrace semi-detached house with a long garden to the rear and side garden on the detached side. In 2008 planning permission was granted to divide the plot in half and to create a new dwelling attached to the current end of terrace house. This end of terrace house had a L shaped rear garden. As such the new dwelling plot became a new title and was sold with this planning permission but with a restrictive covenant applied. The covenant states:

'1. The Transferee must not, without the previous consent in writing of the Transferor, build or erect upon the Property any buildings or structures or erections save for the private dwelling house and boundary walls and fences for which planning consent was granted by the local authority on 13th October 2006, such property to be built strictly in accordance with the said planning consent.

2. The Transferee by way of indemnity covenants with the Transferor that it will observe the covenants referred to in the charges register of the above title so far as they are enforceable and will indemnify the Transferor and his estates and effects against the consequences of any future breach or non-observance of them.'

I assume this covenant was put in place so that the seller was guaranteed to have a neighboring house built that they approved of.

Subsequently the plot with the new dwelling and L shaped garden was divided into two plots - one small plot of garden land at the rear and one plot with the dwelling and garden. The owner of the plot retained the title for the small plot of land and created a new title for the plot containing the dwelling. I'm looking to purchase the small plot.

Firstly, I'm interested to understand the validity of the covenant, as it applied to planning permission for a now constructed dwelling. Surely the intent of the covenant at the time was ensure that particular dwelling was built as the previous owner intended. Now that has happened, is it void? Also now that the site which has the dwelling located on it and for which the covenant was applied, is under a different title, does this potentially invalidate the covenant?

Secondly, I'd be interested in the options for insuring against this covenant and likely costs? The site is 88sqm and on the market for £40,000.

Thanks for taking the time to read this essay! Any advice would be greatly appreciated.

WJP

G_M

Is the covenant attached to the Titles of both the new plots?

If the plot you wish to buy comes with the original covenant, then you cannot build on it other than in accordance with the original Planning Consent (which I assume is impossible as it's already been constructed on the other plot?)

The original transferor imposed the covenant because he did not want constructed anything other than a single dwelling conforming to the Planning Consent.

He did not want two properties build.

WisdomJackPowers

Thank you for your reply G_M

The charges register for the plot I wish to buy contains the covenant. When the plot containing the dwelling was transferred into a new title, the covenant looks to have also been passed to it. The TP1 for the transfer states:

1. The Transferee hereby covenants with the Transferor by way of indemnity to observe and perform the covenants referred to in the Charges Register of Title .... (the small plot title)... so far as they are enforceable and to indemnify the Transferor from and against all actions claims and demands made in respect of any breach of the same arising after the date of this transfer.

The original planning consent dwelling was indeed constructed on the other plot.

My options are either, proceed at risk, scope out insurance costs and insure or steer clear.

Any advice?

Mistermeaner

What are you intending to do with the land? Sounds a tiny plot and is it also access locked?

Can you post a diagram or aerial view

Also yes the covenants appear to apply to your plot of land hence it cannot be built on. Insurance won't help.

davidmcn

I presume you're thinking of building something? Otherwise there's no breach anyway.

I doubt it can be insured against (at least not at any realistic price).

Additional option is of course to negotiate for a variation of the covenant.

£40,000 sounds ambitious given the limitations.

G_M

WisdomJackPowers wrote: »

My options are either, proceed at risk,
you mean buy the plot, breach the covenant by building, and keep your fingers crossed? Mad.

scope out insurance costs and insure
* I too suspect you'd find it hard to get insurance
* if you did get insurance, at best it would cover the cost of removing the building you erect if the covenant was enforced - it would not help you keep the property

or steer clear.
Good idea.

Any advice?

Who was the original transferror of the covenant?
Who is the current inheritor of the covenant (if the original transferor has sold on, moved, died etc)?
What is the likelihood of the breach not being enforced.....?
ie who can/might enforce it?

WisdomJackPowers

Thank you ggb1979 & davidmcn - The intention is to build on it and you're right it is tiny! Access is no problem, it has one 8m side fronting the road. Whilst the site is small, I'm confident I can design something to creatively maximise the space and also gain planning permission. Architecture is my forte, but I'm less clued up on development! Pre-application advice is also on my to do list...

So with insurance out of the question, are there any other options? Is it worth trying to get the covenant removed either through the courts or the original owner?

G_M

WisdomJackPowers wrote: »

So with insurance out of the question, are there any other options? Is it worth trying to get the covenant removed either through the courts or the original owner?

Forget the courts.

Assuming you can identify the current beneficiary, you could approach them, but they will either
a) refuse - they clearly did not want such construction, or
b) want a shed-load of money as compensation

WisdomJackPowers

Thanks again G_M!

Just checked the land registry and downloaded the title for the original plot - the original transferror of the covenant still owns the same house. Damn.

The final option I guess would be... pay lots of money and be incredibly nice and charming to the original transferror to try to get it removed? Is that a potentially messy process?

WisdomJackPowers

Sorry G_M, just seen your reply!

Thanks so much for your advice on this. Will fight to the end and approach the current beneficiary in the slim hope of success. Wont be holding my breath though!

Many thanks all

Cheeky_Monkey

WisdomJackPowers wrote: »

Sorry G_M, just seen your reply!

Thanks so much for your advice on this. Will fight to the end and approach the current beneficiary in the slim hope of success. Wont be holding my breath though!

Many thanks all

Well the fight won't be very long if the original Transferor says no (and means it!). It'll be game over for any plans you may have.