Building Restrictive Covenant

siouxchief

Hi,

I have built a new house on my land but there is a restrictive covenant on our whole estate saying this should not be permitted but the developers of the housing estate have since gone into administration though. I am currently trying to sell my original house and the buyers solicitors are looking for indemnity to cover that house but the indemnity insurers say the risk is in the new house not the old house so they will only cover the new house in terms of indemnity. The buyers arent happy with this as they say they are not covered as the breach of covenant happened when we were living in the old house when building the new one.

Anyone any opinions on this from an insurance/legal or past history of doing similar?

Thanks
David

ProDave

In a previous house I built an extension and genuinely did not know it broke a "no building without permission" covenant. the buyer was happy with an indemnity policy.

In your case the builders would probably asked for a fee to give permission. There's not a lot you can do other than offer the indemnity policy and swear you did not realise you were breaking the covenant when you build (never admit you did)

Davesnave

ProDave wrote: »

There's not a lot you can do other than offer the indemnity policy and swear you did not realise you were breaking the covenant when you build (never admit you did)

But the OP isn't being offered an indemnity policy on the house being sold; that's their point.

OP what is your solicitor advising you to do?

davidmcn

Davesnave wrote: »

OP what is your solicitor advising you to do?

And what are other insurers saying?

I can see the point of the insurers though - if anyone crawls out of the woodwork wanting to enforce the covenant, their ultimate remedy would be to get the new house torn down, so it's the owners of the new house who have the risk.

siouxchief

My solicitor agrees with first insurer that the risk is with the new build not the old house so the indemnity should be for the new build I move into.

We are now getting a second insurers opinion and if both agree we will have to tell the buyers solicitors not to worry about having no indemnity on the house they're buying. Hopefully they then agree.

moneyistooshorttomention

Did you not know before you built the second house that there was a covenant against building more?

EDIT; Checking the timeline from your other threads:

May 2015 - wondering whether to build this 2nd house and say it was for your daughter and then decided not to say it was for your daughter
May 2015 - free visit from architect to see if it's possible to build another house on your corner plot (presumably an architect might indicate if they thought building wouldnt be allowed??)
October 2016 - got planning permission
spring 2017 - built the illicit house

DaftyDuck

Jeeze, money, if people trawled back through your old posts for continuity and good intentions towards whatever.... I know you've recently begun a spate of no building in gardens, no extensions, nuffink, but I don't expect such unreasonable and biased waffle from you, of all peopl...... Oh, hang on, What am I saying... Yep. Moving on...

OP. You may find it difficult to convince their solicitor he is wrong, as nobody likes admitting so. A reasoned letter from the insurer covering your new property as to why the old one doesn't need cover might help. But, ultimately, an insurer - some insurer - will happily take your cash, as cover on the old property is a no-risk win for them.

Try a different insurer. Your solicitor may have a narrow "preferred" (=commission rich) purveyor, but others do exist!