Single private dwelling - can it be removed from covenant/Title Deed

JonMitchell

Hi

It is a rather hypothetical question for some thoughts here really.

Assuming a developer/investor purchased a plot of land, then built a 5-6bedroom property on it with planning permission granted, then rent the property out as HMO with an approved HMO license from the local authority. All steps abided accordingly to regulations and rules.

Now when it come to selling the property, this same developer/investor will be drafting their first convenant within the Title Deed. Their soliticor has included a "Single Private Dwelling" clause in the convenant.

Question:
a.) Having a "Single Private Dwelling" clause is going to prevent subsequent buyers from HMO lettings isnt it? As my understanding of Single Private Dwelling is a family household.

b.) As this would be the first covenant and first sale- can the "Single Private Dwelling" clause be requested to be removed or modified? If modified, what sort of clause would be suitable? 

Thanks for any thoughts on this hypothetical question.
 

user1977

Why would the seller want the covenant (or anything similar) in there in the first place? Are they retaining neighbouring land?

JonMitchell

user1977 said:

Why would the seller want the covenant (or anything similar) in there in the first place? Are they retaining neighbouring land?

Thanks user1977, they had only that original piece of land, which was developed - no neighbouring land that will be of interests.

In view of this property being sold for the first time, is it possible for this "Single Private Dwelling" clause to be removed at all? Which you have pointed out why they have it. 

user1977

JonMitchell said:

user1977 said:

Why would the seller want the covenant (or anything similar) in there in the first place? Are they retaining neighbouring land?

Thanks user1977, they had only that original piece of land, which was developed - no neighbouring land that will be of interests.

In view of this property being sold for the first time, is it possible for this "Single Private Dwelling" clause to be removed at all? Which you have pointed out why they have it. 

I don't understand why it would be inserted in the first place? You'd have it if you were for example developing a whole estate, and wanted to have those sorts of conditions to maintain the amenity etc for the other plots. Anyway, what covenants (if any) are added are a matter for negotiation between buyer and seller.

Section62

user1977 said:

JonMitchell said:

user1977 said:

Why would the seller want the covenant (or anything similar) in there in the first place? Are they retaining neighbouring land?

Thanks user1977, they had only that original piece of land, which was developed - no neighbouring land that will be of interests.

In view of this property being sold for the first time, is it possible for this "Single Private Dwelling" clause to be removed at all? Which you have pointed out why they have it. 

I don't understand why it would be inserted in the first place? You'd have it if you were for example developing a whole estate, and wanted to have those sorts of conditions to maintain the amenity etc for the other plots. Anyway, what covenants (if any) are added are a matter for negotiation between buyer and seller.

My reading of the question is the hypothetical first developer/investor wants to be able to profit from renting out the property as an HMO, but then stop subsequent purchasers doing the same.

As you say, why?

JonMitchell

Am I right to say that such clause could be removed from the covenant - subject to negotiation between buyer and seller?

If in the case of a refusal to remove this SPD clause, is there any other way to modify such clause which then does not affect subsequent buyers who wish to use it as HMO too?

user1977

JonMitchell said:

Am I right to say that such clause could be removed from the covenant - subject to negotiation between buyer and seller?

Yes, like I said above. If it's merely in a draft then it isn't a covenant - it only becomes meaningful once the sale has completed and the deed is registered.

Might help if you explained why you're asking!

JonMitchell

user1977 said:

JonMitchell said:

Am I right to say that such clause could be removed from the covenant - subject to negotiation between buyer and seller?

Yes, like I said above. If it's merely in a draft then it isn't a covenant - it only becomes meaningful once the sale has completed and the deed is registered.

Might help if you explained why you're asking!

Saw a property in Manchester that was as described in my op that was of interest as an investment for retirement but not yet put in an offer, thus the hypothetical questions.

user1977

JonMitchell said:

user1977 said:

JonMitchell said:

Am I right to say that such clause could be removed from the covenant - subject to negotiation between buyer and seller?

Yes, like I said above. If it's merely in a draft then it isn't a covenant - it only becomes meaningful once the sale has completed and the deed is registered.

Might help if you explained why you're asking!

Saw a property in Manchester that was as described in my op that was of interest as an investment for retirement but not yet put in an offer, thus the hypothetical questions.

It's being sold as a going concern as an HMO, doesn't currently have a covenant restricting its use, but the vendor is proposing to add one at the time of sale? 

JonMitchell

user1977 said:

JonMitchell said:

user1977 said:

JonMitchell said:

Am I right to say that such clause could be removed from the covenant - subject to negotiation between buyer and seller?

Yes, like I said above. If it's merely in a draft then it isn't a covenant - it only becomes meaningful once the sale has completed and the deed is registered.

Might help if you explained why you're asking!

Saw a property in Manchester that was as described in my op that was of interest as an investment for retirement but not yet put in an offer, thus the hypothetical questions.

It's being sold as a going concern as an HMO, doesn't currently have a covenant restricting its use, but the vendor is proposing to add one at the time of sale? 

Strange isn't it, I found it very odd to have this clause. Maybe the solicitor was just using a universal template as it is a first sale? Just guessing

Grumpy_chap

Maybe the covenant was attached to the land before the developer built the HMO.
What was there before?