Deed of covenant??

ftb_needs_advice

Hi all enquiries have been completed just awaiting a completion date of freehold purchase but have now been told I need a deed of covenant with the housing association that the seller bought it from? This is what my solicitor wrote:
“You will note that a Deed of Covenant is required and I currently await the same together with the fee payable whereupon I will revert.” 

What does this even mean and how long should I expect this to take?

anyone else been through this?

ftb_needs_advice

Bump!! Please 

Titus_Wadd

It's a way of legally tying you to pay a contribution for the site's upkeep in the form of a yearly (usually) payment called an estate rent charge.  You need to know how much this is currently and how much it could be in future. There'll be negative covenants that set out the things you can't do on the land (the house and rest of the plot you're buying), but I think, because positive covenants (covenants that make you do something) don't "run with the land" this is a legal method of tying all future buyers into paying the estate rent charge.  There'll be a "management company" set up by the developers originally, but once the builder leaves the site the management company may be devolved to the residents or sold on to an investor.  The latter option may see rises in the Estate Rent Charge for dwindling standards of of maintenance.

Ask your solicitor to explain it to you once the paperwork is available for the on-going charge and other conditions it might include; like limiting extensions or other alterations.  You solicitor will be the best person to ask for the particular house you're planning to buy. 

Edit to add:  If you are using the builder's recommended conveyancing firm you might consider getting your own solicitor, one with no vested interest.

Solicitors know not everyone understands the jargon they use everyday; they should explain anything unclear if you ask; it's what you're paying for.

ftb_needs_advice

Titus_Wadd said:

It's a way of legally tying you to pay a contribution for the site's upkeep in the form of a yearly (usually) payment called an estate rent charge.  You need to know how much this is currently and how much it could be in future. There'll be negative covenants that set out the things you can't do on the land (the house and rest of the plot you're buying), but I think, because positive covenants (covenants that make you do something) don't "run with the land" this is a legal method of tying all future buyers into paying the estate rent charge.  There'll be a "management company" set up by the developers originally, but once the builder leaves the site the management company may be devolved to the residents or sold on to an investor.  The latter option may see rises in the Estate Rent Charge for dwindling standards of of maintenance.

Ask your solicitor to explain it to you once the paperwork is available for the on-going charge and other conditions it might include; like limiting extensions or other alterations.  You solicitor will be the best person to ask for the particular house you're planning to buy. 

Edit to add:  If you are using the builder's recommended conveyancing firm you might consider getting your own solicitor, one with no vested interest.

Solicitors know not everyone understands the jargon they use everyday; they should explain anything unclear if you ask; it's what you're paying for.

It’s a 50 year old house not a new build.

thanks for your comment 

ChloeManoey

Are you sure it's freehold? That would seem strange to me. I had to sign a deed of covenant when I bought my leasehold flat. My solicitor told me it effectively means "I agree to the terms of the lease and covenants as did the previous owner". I think it cost about £120 for the solicitors on their side. 

It would be strange to do this if it really is freehold. What are you agreeing, and who with? 

Your solicitor is the best person to ask, that's what you're paying them for  

ftb_needs_advice

I think the person before me bought it from a housing Association so it’s been passed onto me to sign a covenant .. 
@ChloeManoey how long did it take to get this sorted?

Titus_Wadd

Sorry, didn't read the exam question; I saw "housing association" and read "management company"!  doh!
Your covenants might be old and outdated, our house and all around us had to agree not to allow "gypsies" (their word not mine) to camp on the land, or to run a brick kiln.  Covenants like this won't cost you much in time to consider before signing.  You'll have wait and see, but do read them thoroughly or ask the solicitor to clarify anything that's unclear.

ftb_needs_advice

I’ve seen them all on the deeds it’s just that I don’t know how long it’s going to take to get this signed etc 

davidmcn

ftb_needs_advice said:

I’ve seen them all on the deeds it’s just that I don’t know how long it’s going to take to get this signed etc 

It'll depend how long this particular housing association is currently taking to deal with such matters. It's a fairly routine thing though.

ftb_needs_advice

davidmcn said:

ftb_needs_advice said:

I’ve seen them all on the deeds it’s just that I don’t know how long it’s going to take to get this signed etc 

It'll depend how long this particular housing association is currently taking to deal with such matters. It's a fairly routine thing though.

Is there anyway I can find out the answer? In the meantime all enquiries have been completed, contracts signed etc.. would it be reasonable to set a completion date now?

davidmcn

ftb_needs_advice said:

davidmcn said:

ftb_needs_advice said:

I’ve seen them all on the deeds it’s just that I don’t know how long it’s going to take to get this signed etc 

It'll depend how long this particular housing association is currently taking to deal with such matters. It's a fairly routine thing though.

Is there anyway I can find out the answer? In the meantime all enquiries have been completed, contracts signed etc.. would it be reasonable to set a completion date now?

It isn't something you deal with personally - the solicitors are sorting it out. You speak to your solicitor if you need more information about likely timescales.