Restrictive covenants

trix-a-belle

I am looking to start a business and had intended to register it at my home address. Going through my paperwork and due diligence I found there is a restrictive covenant (amongst a long list of others) in the original deed of the developer to the original buyer who sold it to me (I don't have a copy of my deed at present but will obtain one shortly from the land registry) stating "Not to use the Property for any purpose other than as or incidental to one private residential dwelling and not to use the Property for any trade or business"
I do not believe that this has been removed at all when transferring the deed to me.

Is my reading of this correct that I should not be registering/using a business at my address?

Within the list of restrictive covenants on the deed there are also ones such as "Not to erect or construct any building or other structure whatsoever whether temporary or permanent on the Property (except for good quality domestic sheds and greenhouses) without the prior consent in writing of the Seller for which a fee will be payable", "Not to park or cause or suffer or permit to be parked any commercial vehicle caravan or boat on the property between any building on the Property or the Estate Road", "Not to park on or obstruct the Estate Roads or Accessway"
I am very aware of others living in the road who do have companies registered at their addresses, the correspondance and operating address, company registered vehicles parked outside their property, caravans, additional summerhouses constructed do I take it that they are most likely just flouting these covenants?

Also I can not see what benefit may be obtained by the person benefiting from the covenant if I were to use the property for trade or business.
Any assistance on interpretation would be greatly received.

Edit: put in here as I feel the land registry representative may be best to assist & its more relating to title deeds and house purchase/selling than anything else

ThinkingOutLoud_2

OK so I think the key here is what you intend to do.

So if you register a company name at your home address = Not a problem.

If you work from laptop from your desk at home = Not likely to be a problem.

The issue come if you start to change the nature of your premises such that you are running a business. This is not so easily define - but imagine you decided to start making an occasional cake for children's birthdays (no one would be affected) vs. if you decided to start up as a blacksmith in your garden shed banging red hot iron from dawn to dusk.

Go to Google and copy this in "gov uk running a business from home"

G_M

Much depends how old the covenant is, why it was imposed, and who the beneficiary is. For example:

* Country squire sells off plots of land for houses but does not want noisy blacksmiths banging, or retailers with delivery lorries next to his country mansion. He or his family still live there and would be likely to enforce the covenant if it were breached.

* a large building development company owns a plot, builds 100 houses and sells them off as they are completed. To ensure buyers are not put off purchasing the final 20 homes by hoi-paloy who have bought the 1st 80 homes, parking dirty caravans, seting up car maintenace businesses on their front drives etc the developer includes the covenant. Once the final 100th house is sold, the developer moves on and does not give a ****. Though there may be a possibility of the other 99 owners inheriing the benefit of the covenant and being able to enforce against the 1 in breach).

In general, a business that has no impact on the day-to-day lives of the neighbours will be no problem. So using the property as a business registered address, or even running an online business from home is highly unlikely to be an issue so far as the covenant is concerned (though tax, insurance etc need to be considered).

Once your business starts creating noise, or traffic from customers/delivery vans etc, the risk of someone wanting to enforce the covenant increases, though even then many neighbours don't realise they might have that right or don't know how - hence my initial Q about who the beneficiary of the covenant is.

trix-a-belle

G_M wrote: »

* a large building development company owns a plot, builds 100 houses and sells them off as they are completed. To ensure buyers are not put off purchasing the final 20 homes by hoi-paloy who have bought the 1st 80 homes, parking dirty caravans, seting up car maintenace businesses on their front drives etc the developer includes the covenant. Once the final 100th house is sold, the developer moves on and does not give a ****. Though there may be a possibility of the other 99 owners inheriing the benefit of the covenant and being able to enforce against the 1 in breach).

Thanks for the reply, This is what I think is the likely reason they were put in place, estate was built in 2003 (I purchased in 2007)
There is no indication of potential expiry in the deed I have, I see talk on restrictive covenant discussion that I have found online about a covenant being 'dead' but no indication of how it may become so.

My business I am intending on is upholstery so a mix of small items being worked on at home and other items being worked on elsewhere. I have to laugh about your comment on delivery vans as I often get woken by large trucks delivering Next home/Hermes parcels to a next door neighbour who is a courier for them.

I get the feeling I almost have to go digging and provoke a reaction to get a decision either way on any benefit to someone or just do it anyway as others already appear to be, neither of which particularly appeal as I like to know where I stand.

Additionally the deed is in reference to seller/buyer (the restrictive covenant section starts with "The Buyer covenants with the Seller so as to bind the Property and each and every part thereof for the benefit of the land remaining in the Estate and each and every part thereof and the Seller to observe and perform the following restrictive covenants") so surely that transfers with the sale also ie the seller is now not the developer but those who sold to me?

Now getting a copy of the up to date deed
edit: deed filed just references the original title deed and that it contained restrictive covenants so the beneficiary appears to remain as the developer.

da_rule

Restrictive covenants run with the land and whilst mentioned in the original conveyance they may not be expressly mentioned in yours. As the original sale was quite recent the Land Registry should have a copy of the original TP1/TR1 which would have set out the initial restrictions.


As has been mentioned, the key is who benefits, if it is meant to benefit the developer then their interest is probably long gone. If it is meant to benefit your neighbours then as long as you don't annoy them it should be fine. You could argue that your neighbour acting as a courier, causing large vehicles to come onto the estate as part of his business, is as much of a breach as anything you were planning on doing. A failure of others to act on this could be seen as extinguising the restriction.


The other option is that you could contact the developer and ask them either to release you from the covenant or ask them if there are any acceptable business uses or unacceptable business uses.


As long as you're not causing a lot of noise disturbance or causing anything to run off into the estate (dye's etc) then who would know? And who would care?


I have the same restriction on my property, I've had a limited company registered there and I work from home from time-to-time and it's never caused me any issues.

AdrianC

trix-a-belle wrote: »

I have to laugh about your comment on delivery vans as I often get woken by large trucks delivering Next home/Hermes parcels to a next door neighbour who is a courier for them.

That tells you all you need to know about whether the covenant is going to be enforced by the developer or not.

G_M

trix-a-belle wrote: »

...
There is no indication of potential expiry in the deed I have, I see talk on restrictive covenant discussion that I have found online about a covenant being 'dead' but no indication of how it may become so.
very unusual for covenants to lapse, or die, legally, though they may become redundant in reality.

My business I am intending on is upholstery so a mix of small items being worked on at home and other items being worked on elsewhere.
so a business with some (minimal?) deliveries.
I have to laugh about your comment on delivery vans as I often get woken by large trucks delivering Next home/Hermes parcels to a next door neighbour who is a courier for them.
well - now you know you could take him to court to enforce the covenant, assuming his property is bound by it in the same way as yours!

I get the feeling I almost have to go digging and provoke a reaction to get a decision either way
Indeed - and why wake the dragon up if it's sleeping......?
on any benefit to someone or just do it anyway as others already appear to be, neither of which particularly appeal as I like to know where I stand.

Additionally the deed is in reference to seller/buyer (the restrictive covenant section starts with "The Buyer covenants with the Seller so as to bind the Property and each and every part thereof for the benefit of the land remaining in the Estate and each and every part thereof and the Seller to observe and perform the following restrictive covenants") so surely that transfers with the sale also ie the seller is now not the developer but those who sold to me?
The property is bound by the covenant, irrespective of who owns it or how often it is bought/sold.

The beneficiaries of the covenant are any owners of any/all the land involved (the developers original entire estate), irrespective of how many times that land is sub-divided, sold or bought.

So any of your neighbours could enforce against you (and presumably vice verse).

Now getting a copy of the up to date deed
edit: deed filed just references the original title deed and that it contained restrictive covenants so the beneficiary appears to remain as the developer.

1) you need to read the original deed which you seem not to have.
2) no idea why you've concluded "the beneficiary appears to remain as the developer". That is NOT my conclusion!

trix-a-belle

G_M wrote: »

1) you need to read the original deed which you seem not to have.

I am confused why you think this as I stated in my original post that I had been looking a copy of the original deed and the parts I typed and you have specifically referred to from my posts were directly from it.

G_M wrote: »

2) no idea why you've concluded "the beneficiary appears to remain as the developer". That is NOT my conclusion!

Please can you advise why you think otherwise? I do not see why the developer would pass any benefit to anyone else and the title deed now lodged on the land registry refers back to the original title deed where the seller is The Developer and buyer is 'Mr No1 Owner' therefore I take it that any subsequent owner would just take the place of 'Mr No1 Owner'


Since my post earlier today I have downloaded a copy of my title deed that is lodged on the land registry (the sale from 'Mr No1 Owner' to me) which does not have the restrictive covenants detailed but refers to them as follows in the separate sections.
within A: Property Register "The land has the benefit of the rights granted by but is subject to the rights reserved by the Transfer dated *original 2003 sale date* referred to in the Charges Register."
within B: Proprietorship Register "The Transfer to the proprietor contains a covenant to observe and perform the covenants referred to in the Charges Register and of indemnity in respect thereof."
and within C: Charges Register "A Transfer of the land in this title dated *original 2003 sale date* made between (1) The Developer and (2) Mr No1 Owner contains restrictive covenants."

da_rule

Much like the restriction running with the title, the benefit (for post-1925 covenants) also runs with the land.

"For post-1925 covenants this problem was compounded by Federated Homes v Mill Lodge Properties [1980] 1 All ER 371 which indicated that the benefit of a covenant would be automatically and irrevocably annexed to each and every part of the land for which it was originally taken."

This means that where the benefit once belonged to the developer when they owned the whole site, it will now have passed to everyone who has purchased a piece of that land (i.e. your neighbours).

There would be no need to mention the covenants in the transfer to you, as restrictive covenants run with the land. Only positive covenants would have to be added to the transfer documents (using a Deed of Covenant).

NeilCr

I'm a director of an estate where there are a number of existing covenants including one that is exactly the same as yours

We tend to take a pragmatic view on them - as others have said if they don't impact on the other residents then all well and good and we stay out of it.

However, if there is an effect then we would take some sort of action. As an example, somebody set up as a child minder - this caused a number of issues with parking (very very limited where we are) -at dropping off time parents parked where they wanted to without regard to residents parking spaces. We were pretty much getting to the stage of doing something when the person's lease ran out and she moved on

A number of covenants are there to help the developer sell. Prospective buyers, apparently, don't like seeing washing lines, Sky dishes and commercial vehicles. But others are there to ensure residents get what they pay for and what they expect.

trix-a-belle

thanks for that da_rule and NeilCr that makes it clearer, it does make me think people really should be nicer to their neighbours as every example so far has at least 1 offender within my near vicinity that I have wanted to throttle on occasion so i'll just run with my plan and if anything pops up remind people in glass houses not to throw stones.