Deed of covenant to be signed months after house purchased?

Duncan77

Is it normal to be asked to sign a 'Deed of Covenant' for the management company (private road) months after buying the house? 
My solicitor has just contacted me and asked me to sign a draft as "The  sellers solicitors omitted to provide us with a draft Deed of Covenant".
He says this is part of the post completion requirements. 
But shouldn't this have all been done before completion? 
It seems odd to be signing contracts 3 months ater completion. I don't understand what's happening and why now?

N.b.
I am already paying the monthly fee as I took it upon myself to set up a standing order with the neighbour who is the director of the Management Company.

propertyrental

Yes it should have been done earlier, but it's not an issue.

You're already paying - this is just formalising your membership of the Manco.

doodling

Hi,

I would ask my solicitor whether I am already contractually bound to sign it as part of the house purchase contract.

If you are contractually bound to sign it then you dont really have a choice.

If you are not already contractually bound to sign it then I woukd be seeking advice from my solicitor on the costs/benefits to me for both the signing and not signing cases (but see below).

For what it's worth, it would seem unreasonable (perhaps even incompetent) for your solicitor to agree a house purchase contract which requires you to sign another document that you have not had sight of.

Note that your solicitor might have given an undertaking that the covenant would be signed and the breaking of an undertaking is a very serious thing for a solicitor so if you don't have to sign it, they may not give you a very straight answer.

loubel

While it is preferable for such documents to be signed before completion, it isn't all that unusual to sign afterwards. Presumably when your solicitor reported to you they told you you would need to sign it at some stage? 

TBG01

doodling said:

 breaking of an undertaking is a very serious thing for a solicitor.

Which is why you wouldn't give one for something as simple as signing a Deed of Covenant.

Should you have signed it before completion? Ideally yes. Is it the end of the world signing it now? No. Is there a restriction on the title requiring a certifice confirming you've entered into a Deed of Covenant? More than likely. Will you get the property registered without said certificate? No.

On you if you want to go back and forward though. 

doodling

Hi,

TBG01 said:

doodling said:

 breaking of an undertaking is a very serious thing for a solicitor.

Which is why you wouldn't give one for something as simple as signing a Deed of Covenant.

Should you have signed it before completion? Ideally yes. Is it the end of the world signing it now? No. Is there a restriction on the title requiring a certifice confirming you've entered into a Deed of Covenant? More than likely. Will you get the property registered without said certificate? No.

On you if you want to go back and forward though. 

So you are saying that the OP agreed to sign a deed of covenant containing whatever terms the management company saw fit to include - anything?

If the answer is yes then iit is difficult to see how the solicitor is not negligent.  Whether it is worth pursuing that negligence is a different question of course - if the deed says what everyone is expecting then the OP has suffered no loss so it is a moot point.

If the answer is no then what are the constraints on what the deed can contain and does the actual deed sit within those constraints?

This is stuff that the OP has probably already paid his solicitor to advise him on so it doesn't seem unreasonable to ask questions.

I agree that it is likely that the most sensible course of action is for the OP to sign it, but in the OPs shoes I would certainly want to understand what I was agreeing to by doing so and whether I had any choice.

user1977

doodling said:

Hi,

TBG01 said:

doodling said:

 breaking of an undertaking is a very serious thing for a solicitor.

Which is why you wouldn't give one for something as simple as signing a Deed of Covenant.

Should you have signed it before completion? Ideally yes. Is it the end of the world signing it now? No. Is there a restriction on the title requiring a certifice confirming you've entered into a Deed of Covenant? More than likely. Will you get the property registered without said certificate? No.

On you if you want to go back and forward though. 

So you are saying that the OP agreed to sign a deed of covenant containing whatever terms the management company saw fit to include - anything?

If the answer is yes then iit is difficult to see how the solicitor is not negligent.  Whether it is worth pursuing that negligence is a different question of course - if the deed says what everyone is expecting then the OP has suffered no loss so it is a moot point.

This is the case. It's just the OP signing up to the existing conditions. Which they already know about.

Duncan77

Thanks all.

There is a clause in the deed of covenant which I don't understand, I've had no explanations about anything, neither did I know there was something yet to sign.

I was just told what the monthly fee was and I set up a standing order myself after moving in, meeting with the neighbour and getting the bank details of the Management Company. All initiated by me. The neighbour (director) said something along the lines of "I'll need to give you a certificate", (which I haven't yet received).

I don't understand this :-

"To pay to the Company or its solicitors their proper costs in respect of the prepartion and completion of these presents and any stamp duty payable thereon." (last paragraph under OPERATIVE PROVISIONS) What is this payment and who pays it?

My solicitor tells me 'There is usually a fee entailed with a Deed of Covenant. Usually, the Management Company charge a fee to prepare this document, or your solicitor will do so. I prepared this Deed and sought confirmation from the management company before relaying to you. I can confirm we charge no fee in respect of receipt.'

So am I signing that I may still have to pay something extra? Shouldn't this have been prepared and paid for by the seller's solicitor? If so, what if the seller now, over 3 months later, doesn't pay it? 
My solicitor is not charging me a fee for drafting this document, but this is something the sellers solicitor omitted to do. I think my property purchase can't be registered without it, but the sellers solicitor is probably not concerned by that.

loubel

You agree to pay the management company's costs to deal with the deed of variation. Your solicitor says they aren't charging a fee. Even if they did charge a fee, this would be your responsibility to pay, not the seller's.

Yorkie1

Has your solicitor also confirmed whether there will be any stamp duty payable on the deed? (This would be separate from the SDLT for the flat purchase)

user1977

Yorkie1 said:

Has your solicitor also confirmed whether there will be any stamp duty payable on the deed? (This would be separate from the SDLT for the flat purchase)

Why would there be any SDLT payable on it?