Restrictive Covenant

ashpan

I have a 20yr old property with enough land to build another however there is a restrictive covenant on the land which says no other properties can be built. I’ve read about insurance policies and other aspects of and would like the beneficiaries to lift the covenant - I have already contacted the old buikders who have been taken over, I own the freehold and would be prepared to pay a fair price to have it removed, by contacting the beneficiaries have I made an error by putting them ‘on notice’ and how do I find out what a reasonable price would be - if possible I’d like to do this myself without the use of a solicitor but open to input from those better informed!

G_M

Well if I were the beneficiary and you asked me toremove the covenant and allow a 2nd property to be built,I would consider

* the cost of building the new property
* the likely value of that new property when sold
* hence the potential profit
* and I'd want a decent cut of that!

AdrianC

A reasonable price is whatever you and the covenant beneficiary agree on. If you don't agree on a figure, then the covenant doesn't get lifted.

ashpan

Ive read about indemnity policies being taken out in relation to covenants, what would be the purpose of this?

davidmcn

ashpan wrote: »

Ive read about indemnity policies being taken out in relation to covenants, what would be the purpose of this?

Usually to protect against action being taken for historic breaches - it would be very difficult/expensive to get insurance against a still-existing beneficiary objecting to development which hasn't taken place yet, and even with insurance you might have trouble satisfying funders or purchasers. So in practice you'd be best to do a deal with the beneficiary of the covenant.

Surveyor would be a better choice to advise you on the price (and/or negotiate on your behalf) than solicitors, will depend on things like the current and developed values of the property.

LadyDee

There must be ways to get covenants removed. Our Council did it with a huge acreage of green land left by a local landowner to the "people of ...." for leisure purposes - never to be built on. Hmmm.....planning permission has now allowed hundreds and hundreds of houses to be being built on this once public golf course and areas of beautiful walks, and a haven for wildlife. Years of campaigning and protests and petitions by local people all to no avail.

da_rule

LadyDee wrote: »

There must be ways to get covenants removed. Our Council did it with a huge acreage of green land left by a local landowner to the "people of ...." for leisure purposes - never to be built on. Hmmm.....planning permission has now allowed hundreds and hundreds of houses to be being built on this once public golf course and areas of beautiful walks, and a haven for wildlife. Years of campaigning and protests and petitions by local people all to no avail.

They could either have gotten consent or a release from the beneficiary, obtained an insurance policy or applied to the tribunal to have the covenant discharged or modified.

In relation to the OP’s post, as they have seemingly informed the beneficiary an indemnity policy would no longer be available.

Notfarfromtheborder

I've been in a similar situation, albeit some time ago.

I recall paying about 25% of the sale price to get the covenant lifted.

My understanding is that covenants of this nature are not owned by a 'person' but by the 'property that issued the covenant and therefore the owner of said property '

AdrianC

Notfarfromtheborder wrote: »

My understanding is that covenants of this nature are not owned by a 'person' but by the 'property that issued the covenant and therefore the owner of said property '

"By X and successors in title"

PasturesNew

My house is built on a previous garden where there is a covenant saying "do not build, ever", dated from the 1970s.

I've got an indemnity policy as a dozen ended up being built here.

Since I bought, the original houses compelling the covenant were also demolished and built on.

ashpan

can you tell me more about the indemnity policy - if someone took one out being aware of a covenant then built on it - presumably thats when one is covered? excuse the ignorance here!