Buying a house and the kitchen extension done without proper Restrictive Covenant consent

Nospiders123

Hi

Hoping to get some advise here. 
I am close to completing on a purchase and the enquires have come back to say that the kitchen extension done to the front of the building in 2019 does not have restrictive Covenant Consent.
(Slightly annoyed that the enquires came back so late. Not sure if this is the norm.) 
 The seller has offered to provide an indemnity policy which covers various things but obviously doesn't rectify the problem.  I like the property and want to proceed and also want to adjust my price based on the enquiry finding.  Does this seem reasonable and what percentage reduction would seem reasonable. 

Does such a breech generally affect the property price or resell-ability?

The survey has also flagged a few issues like damaging in chimney stacks, leak in garage and leak in shower room that I think should affect my price. 
Again not sure what price reduction for those issies would be seen as ok or too cheeky etc. 
The seller is chain free so not sure if this will affect his willingness to re- negotiate.
Sorry new to this property purchasing thing and want to be careful.  

Happy to hear other people's thoughts. 

RAS

Have you checked the local Council's planning portal to see if any permission was granted? You don't want to be asking them directly as that invalidates any possibility of indemnity.

Development permission in front of the building line is usually much harder to obtain. And I'd have thought it much easier to identify as having been done when comparing neighbouring houses?

bobster2

RAS said:

Have you checked the local Council's planning portal to see if any permission was granted? You don't want to be asking them directly as that invalidates any possibility of indemnity.

Development permission in front of the building line is usually much harder to obtain. And I'd have thought it much easier to identify as having been done when comparing neighbouring houses?

Yes important to check for planning permission. However, if there was a restrictive covenant (e.g. not to extend / alter without consent of developer - something like that) then this won't be recorded on the Council's planning portal. That sort of covenant is not a planning issue.

You can have planning permission and still breach a covenant.

With older houses often the beneficiaries of particular covenants are long gone (e.g. the developers). So they are not a concern. Where there are more likely to be problems are situations where the neighbours are beneficiaries - so could enforce them.

Nospiders123

bobster2 said:

RAS said:

Have you checked the local Council's planning portal to see if any permission was granted? You don't want to be asking them directly as that invalidates any possibility of indemnity.

Development permission in front of the building line is usually much harder to obtain. And I'd have thought it much easier to identify as having been done when comparing neighbouring houses?

Yes important to check for planning permission. However, if there was a restrictive covenant (e.g. not to extend / alter without consent of developer - something like that) then this won't be recorded on the Council's planning portal. That sort of covenant is not a planning issue.

You can have planning permission and still breach a covenant.

With older houses often the beneficiaries of particular covenants are long gone (e.g. the developers). So they are not a concern. Where there are more likely to be problems are situations where the neighbours are beneficiaries - so could enforce them.

Thanks for your comment. I might ask my solicitors to check that the beneficiaries are not the neighbours.  

HelpfulLittleHelper

If you change the price, you will have to redo all the paperwork, potentially change your mortgage offer too so it will delay any exchange/completion. You say you're close to completion but only now have the searches back, so you haven't even exchanged Id imagine?

HouseMartin567

I bought a house where the extension had the required planning permission and building regulations sign off, however, it broke the restrictive covenant of needing to seek permission from the house builder before making alterations. Considering the house was 30-40 years old the risk seemed low so we were satisfied with an indemnity policy. I don’t think it’s an issue which would have caused me to ask for a reduction - and considering how much the seller moaned about paying for the indemnity policy, I’m certain they wouldn’t have entertained the idea of a price reduction.

As suggested by bobster2, probably best just to check who owns the covenant and then go from there.

user1977

What's the logic for changing the price? The whole point of the indemnity insurance is that it will keep you free of expense in the very unlikely event of anything adverse happening. Isn't your solicitor explaining this to you? 

Albermarle

The survey has also flagged a few issues like damaging in chimney stacks, leak in garage and leak in shower room that I think should affect my price.

Of these three probably the last would concern me a bit. If it has been leaking a long time , it may have caused the floor or the ceiling below to be damaged. Did the survey give any details?

Nospiders123

HelpfulLittleHelper said:

If you change the price, you will have to redo all the paperwork, potentially change your mortgage offer too so it will delay any exchange/completion. You say you're close to completion but only now have the searches back, so you haven't even exchanged Id imagine?

We have not exchanged. I was not sure how this would affect the mortgage offer. I assumed my broker would just let the lender know that I now need less money. 

Had not thought that far. 

Nospiders123

user1977 said:

What's the logic for changing the price? The whole point of the indemnity insurance is that it will keep you free of expense in the very unlikely event of anything adverse happening. Isn't your solicitor explaining this to you? 

Yes its a fair point. However, its just one more thing to probably worry about. I am not the luckiest person. 
I worry about potentially selling the property on. Will other buyers down value the property, will it put other buyers off. 
Also the non monetary impact that the insurance will not cover if something arises. 

Nospiders123

Albermarle said:

The survey has also flagged a few issues like damaging in chimney stacks, leak in garage and leak in shower room that I think should affect my price.

Of these three probably the last would concern me a bit. If it has been leaking a long time , it may have caused the floor or the ceiling below to be damaged. Did the survey give any details?

Thanks for flagging this. 
The leak has caused some damage in the ceiling below. 
The survey gave very light detail. 
However, I had a plumber look into it and its potentially issues with the waste which means the whole shower might need to be pulled out.