Restrictive Covenants

adamenergy

I have recently been given a plot of land where planning permission for a self build is likely to be granted, however on reviewing the title deeds there is a restrictive covenant that was put in place by the church of england back in the 1950's which states the formal pastoral land should not be used for any purpose other that agriculture or farming or as a paddock. The remaining and open church is located around 500 meters away from the plot and is not in sight of the church grounds so seems building on the land would have no impact on the church itself which we assume is the reason the covenant was originally put in place. Since the original covenant was put in place other houses have been built in the near vicinity to the plot I have been given. From the reading I have been doing it's very hard to distinguish whether the church could successfully enforce the covenant so if money was not an issue we would build and take our chances. However we need financing to build and no self build lender is willing to lend on the back of a covenant attached to the land stating no change of use regardless of whether an indemnity policy was in place to cover and claim against the breach. Confused at this stage as to what we do next, being the cynical sort of person I am I can bet if we approach the c.of.e I expect them demand a princely sum for the removal or relaxation of the covenant which may make the build unaffordable before we even get going. Any help would be greatly appreciated

G_M

On the face of it (without knowing the full history or seeing the covenant in full) it would appear the church would have the option to enforce the covenant if they wished.

Whether they would do so is impossible to say.

As indeed it is impossible to say whether they would agree to rescind the covenant if asked.

davidmcn

If it's deemed to be enforceable, and insurance isn't an option, then I don't see what you have to lose by approaching them - if they refuse or ask for silly money then you're left with the current status quo.

Hoploz

If you had already built on the land and you had breached a covenant you could buy indemnity insurance to cover you should they wish to enforce it. Perhaps you could buy the insurance beforehand? Have you asked your conveyancing solicitor about this? I see you were given the land - you did get the transfer overseen by a solicitor though?

davidmcn

Hoploz wrote: »

If you had already built on the land and you had breached a covenant you could buy indemnity insurance to cover you should they wish to enforce it. Perhaps you could buy the insurance beforehand?

You can, but OP has said that insurance wouldn't be acceptable to funders.

Hoploz

Ah ok sorry I missed that. It doesn't normally cause a problem when buying an affected house second hand which has breached covenants.

adamenergy

Thanks for all your replies and input, as davidmcn said approaching seems the only option remaining. Re the land being gifted, the transaction hasn't yet been completed as it was the solicitors dealing with the paperwork on behalf of a relative that has picked it up. Does anyone have any knowledge of dealing with diocese's property teams as there seems to be nothing on the internet of peoples past experiences?

I have read lots of the c'of''e handbook which relate to this and they have a flow chart of how they approach relaxing or removing covenants. It seems the covenant is classed as 'nuisance value' but again searches on the web yield little about what this term means in practice. In a round about way their rule book that the diocese's are advised to follow say if its a corporate trying to remove covenants milk them for what they are worth, as a sole person they just cant impact the wellbeing of the incumbent which is very vague.

The family history attached to the land is long. the diocese sold off the rectory in the 50's to my grandparents along with land over the road from the rectory (which is what I will be part gifted.) As mentioned both the rectory and the land cannot be seen from church and is a 5 minute walk down the road. The house was eventually sold when my grandparents passed away but the land was passed to their daughter / my aunt prior to their death. Family horses have been kept on the land, I built tree houses there and so on hence wonder whether the church are purely mercenary when looking at what cash can be extracted from people or whether these things are taken into account. I read a long article on covenants which also pointed out how enforcement of negative covenants are applied via the courts. looked at both common law and equity law (all beyond simple me) but what I am trying to decipher is how strong a position the c of e would be in, which would have an impact on their bargaining potential for cash I assume. if you google.'covenants what you need to know about' a site pops up regarding land registry and here you will find said compelling article. Appears I cant yet post links.

sorry for the life story but the more information hopefully the more insightful the advice.

Land_Registry

Not too sure if this is the article you were referring to or not? - one of our blog articles

The key thing to remember with restrictive covenants is that they are imposed for the benefit of other land. In this case for the land owned at the time they sold/gifted the land. As such the benefit can pass to other landowners as well, especially if they sold/gifted other parcels of land after these covenants were imposed.

The fact that the Church is down the road and the land is out of sight is largely irrelevant. They imposed the covenants for a reason and for the benefit of the retained land. Whilst the reason for doing so may be of interest the important factor I suspect is how they view it now.

So if indemnity insurance is not an option then it's likely to be a case of trying to identify the extent of the benefiting land and then approaching the owner(s) to see if they will release your land from the covenants. With a bit of luck that benefiting land is still owned by the Church.