Unknown Restrictive covenant

sathe

Hi,

I am currently selling my property and the buyers solicitors have said there is unknown restrictive covenant dated from 1934. The house was only built in the last 6 years and I am the only owner.

My solicitors say I need to take out something called Idemtity insurance for this unknown covenant.

Its around £250 but I dont understand why its needed when it wasn't when I purchased, or remortgaged. Surely this is something the buyer needs to take out not me?

Any advice from people in "the know"?

Hoploz

It should state what the covenant is in your deeds. What is it?

From that long ago, it is probably something to do with the land not being able to be built on, at a guess.

Your solicitor should have picked this up when you bought but obviously didn't.

An indemnity policy protects you if a covenant has been breached and the beneficiary challenges you.

PasturesNew

It's probably from when the land was first sold. It might've said "nothing to be built, ever". It's common now that those bits of land have been built on and the developer should've provided you with an Indemnity Policy when you bought the house. Maybe you have it and don't realise.

It is really for you to buy one now, because it's something any other buyers might raise. Just best to bite the bullet rather than losing the buyer over what's an annoying triviality.

sathe

Ok thanks for the replies Guys.

I guess I didn't understand why I needed to take out insurance for an "unknown" on a property I am selling. It made no sense to me!

stator

The solicitor really should be able to tell you what the covenant is. The documents should be obtainable from the land registry.

SevenOfNine

There is one on our son's property, something to do with a chancel repair liability.

sathe

stator wrote: »

The solicitor really should be able to tell you what the covenant is. The documents should be obtainable from the land registry.

Sadly they say its an "unknown" and the land registry do not have a copy of it as it was not produced on registration.

G_M

hence neither your solicitor, nor the buyer, nor his solicitor, knows what nasty shark might be lurking in the legal waters.......

hence the need for insurance for the buyer 'just in case'.

maninthestreet

SevenOfNine wrote: »

There is one on our son's property, something to do with a chancel repair liability.

:eek::eek::eek:

AdrianC

sathe wrote: »

I guess I didn't understand why I needed to take out insurance for an "unknown" on a property I am selling. It made no sense to me!

There is a note, somewhere on file, referring to a legal covenant which says something about the land. The problem is that nobody knows what that is, who could enforce it, or if you're in breach of it. You can never know unless and until somebody comes forward with the paperwork - potentially saying something along the lines of "This says that you've done something you shouldn't, and you owe me £x,000 or I will enforce it." Potentially, that could include you demolishing your house.

The indemnity policy covers the legal costs in such a situation.

DaftyDuck

Are you, by any chance, using the same solicitor as you used to buy it? If so, ask them why it was not highlighted then, and would they like to help amend their error.