Covenant

PBtrebor

If there is a covenant between two flats in a converted house and changes have been made breaking the covenant over 10 years ago and nothing to do with me, can one party refuse to sign any further covenants to prevent me selling my freehold flat? Is this totally irrefutable? Is there anything I can do? Or do I get a Cash buyer and take a reduction in value?

anselld

I think you need to explain in more detail what the ownership arrangement is and where the covenant fits into that.

It is not clear how a third party refusing to sign a covenant would prevent a sale, but assuming it is the case, what is the third party asking for in order to proceed?

PBtrebor

It's a house converted into two freehold flats with separate gardens. Each flat signs a covenant between them explaining who can do what - telling one another when they are doing work, not altering pipes, electrical wiring etc. Over 10 years ago the top moved the kitchen - downstairs flat was informed and didn't want it but the council said it was ok so it went ahead. There have been various owners since but the new buyers need a mortgage and the mortgage company have drawn up a whole new covenant that downstairs are refusing to sign.

sheramber

What does the nw covenant say?

PBtrebor

Don't know, it's not our business really unless they don't sign!

sheramber

You said they are refusing to sign it so it is your business.
There might be a very good reason for not signing  it depending on what it says. It might be to their disadvantage to sign.

eddddy

Your posts are a bit difficult to follow...  Is this the case:

• You own a freehold flat in a block of 2 flats
• Each new flat owner (including you) must sign a deed of covenant when you buy the flat
• A previous owner of your flat breached the Deed of Covenant, by moving the kitchen

• You now want to sell your flat
• The buyer's mortgage lender is unhappy with the terms of current deed of covenant - and wants both flat owners to sign a new deed of covenant with new terms

Does the buyer's mortgage lender want a new deed of covenant because the kitchen has been moved - or for some other reason?

You cannot force the other flat owner to sign a new deed of covenant. (Moving the kitchen makes no difference to this.)

But if a new deed of covenant is required in order to make both flats mortgageable, it's in your neighbours interests to sign - it would increase the value of their flat.


Is your neighbour saying that they will only sign the new deed of covenant if you move the kitchen back to where it was? Or are they saying something else?

PBtrebor

Yes, you've covered the main points correctly. Our solicitors have asked the buyers solicitors to ease up a bit on the things they want and as you say it's in both parties interests to sign. We are just concerned that they will not sign anything!! Although they have signed covenants previously. We are just concerned they won't sign at all and can we sell IF they won't sign anything or are we stuck!!
Many thanks for your help - this is a living nightmare !!

PBtrebor

We have offered inducement and to move the kitchen back AND what do they want but he says he doesn't want anything as the covenant was broken.

eddddy

PBtrebor said:

Yes, you've covered the main points correctly. Our solicitors have asked the buyers solicitors to ease up a bit on the things they want and as you say it's in both parties interests to sign. We are just concerned that they will not sign anything!! Although they have signed covenants previously. We are just concerned they won't sign at all and can we sell IF they won't sign anything or are we stuck!!
Many thanks for your help - this is a living nightmare !!

As I said, you cannot force the other flat owner to sign the deed of covenant if they don't want to.


You don't mention what's in the deed of covenant (or how it's different from any previous deed of covenant) -    so it's impossible to suggest whether the buyer is being reasonable or unreasonable; or whether your neighbour is being reasonable or unreasonable; or whether somebody else would buy your flat without the deed of covenant.


To be honest, if I was your neighbour, I would want my solicitor to check a deed of covenant before I signed it. And I would probably expect you to pay my solicitor's fee for checking it. (Maybe you could suggest that idea to your neighbour.)

GDB2222

PBtrebor said:

We have offered inducement and to move the kitchen back AND what do they want but he says he doesn't want anything as the covenant was broken.

It does sound like he has been waiting for over 10 years for his revenge over the kitchen.