Got Planning Permission—but a Covenant Says No! What Will Insurance Cover?"

WIAWSNB

user1977 said:

Hermann said:

Despite having PP granted it sounds like actually developing the land would be unlawful.
No insurance policy is going to cover you for knowingly & deliberately acting unlawfully.

On the contrary, title indemnity insurers cover this sort of risk day in and day out.

But not if you bring it to the attention of the covenantee first?

aliby21

Did the seller just get planning permission to build a house, or did the also seek planning permission for change of use from agricultural land to residential?

WIAWSNB

Hang on, isn't it the Planning dept wot impose and then enforce aggie ties in the first place?
Are they giving PP against their own covenant?
That would be funny...

Section62

aliby21 said:

Did the seller just get planning permission to build a house, or did the also seek planning permission for change of use from agricultural land to residential?

Change of use would be implicit in consent for the house - the land within the application plan red-line boundary would become residential with the building of the house.  AFAIK it would remain agricultural if the house isn't built.

Section62

WIAWSNB said:

Hang on, isn't it the Planning dept wot impose and then enforce aggie ties in the first place?
Are they giving PP against their own covenant?
That would be funny...

This isn't an agricultural occupancy condition (/tie).

RHemmings

Section62 said:

Bigphil1474 said:

...
Depends on the wording and age of the covenant but I'd be surprised if it is enforceable given you have planning permission from the local council. ...

Planning consent doesn't override things like land ownership and covenants.

You can get planning consent to build a house on land you don't own, or which would put you in breach of a restrictive covenant.  The planning system (usually) assumes you'll sort those issues out separately before starting the build.

That seems to create some interesting potential situations. First, in theory someone could apply for planning permission for land that they don't own. And, if they get it, make the owner of the land an offer to buy it. 

However, in a planning application, people in the area are informed. Which would presumably include the owner of the land itself. Who would then be aware of the increased value of the land and could negotiate appropriately. And, I would presume that if planning permission had been granted for some land, then I'm wildly guessing that the chance of a near identical planning permission application being approved would be good. So, the land owner could refuse to sell and then simply make a like and similar application. 

There may be a way to balance both interests. E.g. enter into a contract with the landowner that planning permission will be applied for their land. And, if the planning permission is granted, then there is then a sale at an agreed price. 

Returning to the topic of the thread - if I was in the OP's situation I would identify who benefits from the covenant, and then negotiate a payment to them for their agreement. 

Section62

RHemmings said:

That seems to create some interesting potential situations. First, in theory someone could apply for planning permission for land that they don't own. And, if they get it, make the owner of the land an offer to buy it.

This isn't an uncommon thing to happen.  There's also cases where someone wants to extend or improve a property but wouldn't want to buy it if they can't get planning consent.  In practice though it is more common to approach the landowner first and enter into a contract with them because...

RHemmings said:

However, in a planning application, people in the area are informed. Which would presumably include the owner of the land itself. Who would then be aware of the increased value of the land and could negotiate appropriately.

...the landowner has to be notified by the applicant before the application can be registered, so the owner is definitely going to find out.

RHemmings said:

And, I would presume that if planning permission had been granted for some land, then I'm wildly guessing that the chance of a near identical planning permission application being approved would be good. So, the land owner could refuse to sell and then simply make a like and similar application.

...and the planning consent applies to the land/property, not the individual who made/paid for the application.  So the landowner doesn't need to go to the trouble and expense of making their own application, they can just use yours.  Sometimes a S106 or other agreement needs to be made 'with the applicant' which can complicate things, but isn't an absolute impediment to someone else (like the landowner) doing the things required to be able to implement the consent.

So....

RHemmings said:

There may be a way to balance both interests. E.g. enter into a contract with the landowner that planning permission will be applied for their land. And, if the planning permission is granted, then there is then a sale at an agreed price. 

...in these situations it would be typical for the applicant and the landowner to enter into some form of conditional contract - i.e. the landowner agrees to sell to the applicant at a given price, but the applicant only has to go ahead with buying the land if they are able to obtain consent.  Again typically the contract will be valid for a specified period of time, during which the landowner wouldn't be able to sell to someone else.  So there are pluses and minuses for both sides of entering into such contracts... the selling landowner is often the one placed at some disadvantage, and a sensible one will want to be well compensated for their trouble.

k12479

user1977 said:

If the beneficiary of the covenant wasn't jumping up and down as soon as the planning application was submitted then it would seem more likely that they're not going to be a problem.

I would be careful of making that assumption.

a) They may not be aware until they happen to see construction commencing/completed and b) whether they're aware or not from the planning stage, the savvier covenant holder may wait until you've invested more in the build and have more to lose.

user1977

k12479 said:

user1977 said:

If the beneficiary of the covenant wasn't jumping up and down as soon as the planning application was submitted then it would seem more likely that they're not going to be a problem.

I would be careful of making that assumption.

a) They may not be aware until they happen to see construction commencing/completed and b) whether they're aware or not from the planning stage, the savvier covenant holder may wait until you've invested more in the build and have more to lose.

No, of course it isn't a certainty, but it's the sort of thing the insurers would be interested in knowing.

LordWinterbottom

Section62 said:

LordWinterbottom said:

I’m buying a piece of land that has planning permission to build a house, but it also has a restrictive covenant saying it can only be used for agricultural purposes.

....

Can you clarify whether the 'agricultural purposes' means agricultural operations (e.g. growing crops or keeping livestock), or is it wider, for example to provide housing for agricultural workers?

The title register says "that they will only use the property for agricultural or equestrian purposes" no further details are given.