Covenants

Baldytyke88

There was a news item on radio four today, about 'Asset Invest' buying up old covenants and changing house owners thousands to have the covenants dismissed.

More than a dozen homeowners received letters in August telling them they needed retrospective permission for alterations under the terms of restrictive covenants on their homes.

https://www.bbc.co.uk/news/articles/cddqry9zrl6o

Section62

I've always felt the advice often given on the forum that nobody cares about covenants once the developer has packed up and gone was a little bit cavalier. To me it always looked like a potential money-making opportunity for someone… someday.

Hopefully the government will look at legislating to limit what people can be charged, and hopefully the legislation won't harm covenants that have benefits for residents and wider society more generally.

TroubledTarts

So the houses did have restrictive covenants that were never followed by the residents or enforced by the original housebuilder?

A new owner of those covenants now wants to enforce them.

Interesting 🤔

RelievedSheff

It would be interesting to see how a court viewed the new covenant owners demands for payment given how it is almost impossible for them to uphold covenant breaches in court.

I would personally just ignore the demands for payment.

Section62

https://forums.moneysavingexpert.com/discussion/comment/81978933#Comment_81978933

Do they need to go to court?

If there is an indemnity policy the insurer may just pay up to make the problem go away.

If there is no indemnity policy then now the claimed beneficiary of the covenant has highlighted the issue and asked for something then when it comes to selling the property the vendor either has to be economical with the truth with the buyer, or pay the beneficiary off. Getting indemnity insurance would be difficult (if not impossible), and buyers (particularly with a mortgage) may decide it is too risky to take on a property with a breach of covenant that may now be pursued.

If this becomes common then indemnity insurance for breach of covenant may become rather more expensive.

Baldytyke88

https://forums.moneysavingexpert.com/discussion/comment/81978903#Comment_81978903

This is the article from radio four.

https://www.bbc.co.uk/sounds/play/m002vm4x