Urgent advice please - covenant/indemnity?

Bossworld

Meant to be completing Friday, slow progress but been sent this and I don't understand some of the terms and implications.

Could anyone please kindly advise before I go back to the solicitors?

Thank you kindly

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We have received a response to our enquiries from the vendor’s solicitor. They have advised that the porch was erected at the property in around 1990 and the double glazing was installed in around 2000.

As the works referred to were undertaken over 10 years ago (and we presume were not concealed), the period in which the Local Authority could take enforcement action in respect of a breach of planning or building regulation (if any) has expired unless there is a risk to the owner/occupiers of the property and the public in general, which we trust your survey would have revealed. We do not, therefore, intend to make any further enquiries in this regard. We would recommend that you ask your surveyor to comment on the structure of the extension and the quality of the work carried out.

As detailed in our Property Report, the porch extension would have required covenant consent, but the vendor is not able to confirm covenant consent was obtained. Their solicitor has stated they will not provide any paperwork in this regard, which we presume includes providing indemnity insurance, as the works took place in 1990. Their response is common when the works are carried out over 20 years ago, as many conveyancers state the covenant cannot be enforced after this time. We do not believe this is correct. To our knowledge the covenant could be enforced, although, as a significant period of time has passed since the works were completed, it will be difficult for the covenantee to convince a court to enforce the covenant.

The remedies available to a covenantee if a covenant has been breached are an injunction and/or damages. However we do not believe the covenantee would be able to seek damages from you as a successor in title to the breach.

Indemnity insurance is available to protect you against a claim made by the covenantee, whether there is merit in the covenantee’s claim or not. Your mortgagee does not require us to obtain this insurance as the works took place over 20 years ago, however, you may choose to obtain the same for peace of mind. The premium for the policy is £110 and our fee to report to you on the terms of the policy and put the same in place is £75 plus VAT. If you would like more information about this please let me know.

Could you please confirm whether you are happy to proceed and whether we may exchange contracts for completion tomorrow

Guest101

Over 20 years? I'd leave it personally.


Exchange and complete as scheduled

Kaius2009

Hi,


Im not an expert but am in a similar boat in regards to indemnity insurance and things.


I would assume, judging by what your solicitor has said, that yes a covenant has been broken, but the come back on it as the works were completed so long ago is not likely to be a problem in the future. They have suggested indemnity insurance so as to give you options if you're really worried, but it would not be seen as essential so would be personal choice.


Hope it all goes well and you get completed tomorrow! How exciting!


Im just waiting for the vendors solicitors who are taking their sweet time to respond!

BJV

TBH I am not an expert but we sold our house last year and the builder who converted our garage had breached local planning ( bay window was over allowed size ) etc & had not had buildings regs signed off, but as it was over 10 years ago the local inspector came poked around, tested bits and bobs and gave us a certificate. ( think it cost us about £200ish . We also paid for the insurance for the buyer. That way there was peace of mind for us both.

I know that this late on you do not want extra expense but it will be considering this late on and 100% worth it for peace of mind.

MobileSaver

Bossworld wrote: »

The premium for the policy is £110 and our fee to report to you on the terms of the policy and put the same in place is £75 plus VAT.

The risk of anyone caring about a covenant from 20 years ago on such a minor issue is infinitesimally small.

My honest opinion is that you would be completely wasting £200 by taking out the indemnity. All the indemnity does is protect you from legal action, it doesn't normally cover rectifying the actual issue which would possibly cost less than £200 anyway! My understanding is that in the extremely unlikely event that the issue ever came to light you will initially be given the option to rectify the breach before you end up in court so again making the indemnity a waste of money.

Hoploz

Your solicitor is correct - the covenant could be enforced any time, there is no actual limit, unlike planning or building control breaches.

However your solicitor advises it is extremely unlikely to happen, but if you want total peace of mind then you might like to buy the indemnity.

Since your lender is not requesting this, I wouldn't bother. And if it is queried whenever you come to sell, you can show the buyer the statement your solicitor has made.

Bossworld

Thank you all very much. Haven't got much mobile signal so didn't get much time to research it.

The solicitor tang shortly after and I've decided not to go for the policy, they said despite it being a freehold it's possible the builders could enforce it but extremely unlikely as already answered by you folks.
Given the builder hasn't existed for many years (although the name continues as an estate agent) I reckon we'll be OK.

Thanks again

Guest101

Someone will own the covenant, but they're put in place so that the properties all look pristine whilst the builder sells them.


Once they're all sold, its very rarely enforced.

Chanes

I don't think it would worry me, I would think the chances of someone enforcing a covenant from so long ago on something safe would be tiny. I get a sense from the other replies not many, if any, would be too concerned either? You could buy the policy for the peace of mind if you wanted. Enjoy your new home!

G_M

As you don't quote the covenant, we are responding blindly.

However a key factor is surely to identify who (or rather which land) is the beneficiary of the covenant?

Whether the lan-owner in question is likely to enforce the covenant will depend who (and where) they are.

Bossworld

G_M wrote: »

As you don't quote the covenant, we are responding blindly.

However a key factor is surely to identify who (or rather which land) is the beneficiary of the covenant?

Whether the lan-owner in question is likely to enforce the covenant will depend who (and where) they are.

Simply because I don't know the answer. I have not been given any information as to what any of the solicitor's enquries are, or have been.

The solicitor called shortly after the email (as I'd advised them already that I had v. little internet access today), and said it was something they noticed while tidying up the file (that the vendor's solicitors had never responded to).

The only other information I can give, is that I asked 'does this mean the council can demand the removal of the porch' and they advised no, it would be the original builders (as above, they do not exist as builders anymore, and the house dates back to the 1950s).

Shall just move on with life