Buying a plot of land with restrictive covenants

WisdomJackPowers

Cheeky_Monkey wrote: »

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.

Hence I will not be holding my breath.

Thanks for your advice all!

racing_blue

Propose a profit-sharing arrangement?

Say - you buy the land; you build; you sell; they receive 25% of net profits and in return waive covenant.



Do you think they might go for a profit share arrangement?

Mistermeaner

Good luck and do come back and update us, be interested to know how you get on.

DandelionPatrol

G_M wrote: »

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.

As OP describes the situation, the covenant would only not be attached to the title in question as a result of an error by the Land Registry. Which would be a can of worms rather than a get out of jail free card.

WisdomJackPowers

racing_blue wrote: »

Propose a profit-sharing arrangement?

Say - you buy the land; you build; you sell; they receive 25% of net profits and in return waive covenant.



Do you think they might go for a profit share arrangement?

I think this would be the lowest risk proposition, although I may opt to offer up a lower percentage to give up... I honestly have no idea at this point in time whether the owner would go for it or not. I guess it boils down to a good sales pitch from me and hoping they are open minded. If they did agree to a deal, how would I contractually lock them into it?

It's tempting to also commission a valuation of their property both without and with my proposed build. This could help quantify any compensation.

I also think there needs to be some downward movement on the 40k plot value... either the seller is unaware, has a deal already with the beneficiary or is chancing their luck.

Many thanks

DandelionPatrol

G_M wrote: »

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

The shed load of money is likely but need not be a show stopper.

Essentially, you need to make the seller responsible for lifting the covenant within the negotiated price. As there is no planning permission, if I read it correctly, you just need to factor in lifting the covenant in much the same way as you would factor in planning permission. It would probably need plans in the same way.

Hoploz

So is the seller you are considering buying from the person who benefits from the covenants? If so you can just ask them what their intentions are by selling the land ... What do they expect a buyer to do with it?

eddddy

WisdomJackPowers wrote: »

...
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...
...

Assuming you find a solution for the covenant, it sounds like you're still planning to buy without planning consent.

Positive pre-application advice would be reassuring, but it isn't a guarantee of getting planning consent. (And I suspect the plot's value would plummet without planning consent.)

In this situation, many professional developers would go for a conditional contract or an option to purchase (although the purchase price tends to be higher to reflect the reduced risk to the purchaser).

WisdomJackPowers

Hoploz wrote: »

So is the seller you are considering buying from the person who benefits from the covenants? If so you can just ask them what their intentions are by selling the land ... What do they expect a buyer to do with it?

Thanks Hoploz. Unfortunately it isn't, the beneficiary is a next door neighbor. Had it been the seller of the land I'm interested in I would be a much stronger position to negotiate...

WisdomJackPowers

eddddy wrote: »

Assuming you find a solution for the covenant, it sounds like you're still planning to buy without planning consent.

Positive pre-application advice would be reassuring, but it isn't a guarantee of getting planning consent. (And I suspect the plot's value would plummet without planning consent.)

In this situation, many professional developers would go for a conditional contract or an option to purchase (although the purchase price tends to be higher to reflect the reduced risk to the purchaser).

Thanks eddddy. Ideally I'd like to go for an option to buy, but the seller isn't interested in being tied into that and just wants to get rid. Not sure if alarm bells should be ringing based on that also.

Planning is also a risk, but the reward could be high if it is granted. A previous application was refused only on the grounds of,1. Poor quality living accommodation due to limited light and views. 2. A design which is not in keeping with the area - on a street of semi detached Victorian houses they had proposed a bungalow. The D&A statement was one A4 page in comic sans. It's safe to say both the design and application were total diarrhoea, so whilst having no guarantees, I'm confident I can produce a design and application, which positively satisfies the previous grounds for refusal. Pre-app advice will help me sleep easier, whilst it is not binding it can really help in appeal.

I'm willing to take a punt, and acknowledge I could be left with a tiny useless plot in the end. It's all about risk vs reward I guess and all this initial research will help me decide if it is really worth taking that punt.