Restrictive Covenants in New Build Contracts

(14 Posts)
Anxioustaurus123 Tue 17-Dec-13 16:26:04

Hi There,

I have been reading reviews on mumsnet for most topics and really appreciate honest feedback mumsnet members provide, hence thought this will be the best forum to post my question on New build contracts.

Any information is much appreciated!!

While reviewing our New build contract I noticed a Restrictive clause stating 'We cannot make any alteration or amendments to the property and if we are to make any, we will need to obtain permission from the Developer. Developer may charge us fees to grant any such permission'.

It is a terraced Freehold property. I was wondering if anybody else has such a restrictive clause in their contracts and if so for how long is that clause valid for.

Thanks for your help.

Regards
Anxioustaurus123

LIZS Tue 17-Dec-13 16:31:28

They are quite common on new developments to maintain some uniformity and control. Not fencing front gardens and having a caravan/boat outside are typical too. Legally I believe it is effective as long as the developer exists and it may be passed on to whoever continues to manage the estate or even among the owners when the developer moves offsite. Whether the covenant continues to be enforceable over time is debatable though.

Kayakinggirl86 Tue 17-Dec-13 23:27:25

I have that clause in my deeds as well, but I also need to ask the parish council (they had the land before the developer) also not allowed anything in the front garden, and have to keep my grass bellow 3inches at all times.
Silly rules but love my house and village so happy to keep it look uniformed and pretty.

2plus1 Wed 18-Dec-13 08:11:03

I had this on two properties I have owned. The latter was a new build and for example the builder would charge £500 to give permission for a conservatory addition. However this covenant was only in place for 5yr. In a previous property I only realised the covenant existed when I sold. The builder solicitor asked for the permission documents for a conservatory added by a previous owner. I and my solicitor were unaware of any such permission. My options were to remove the conservatory or seek retrospective permission from the builder. The house was 15yr old and the builder had been taken over by another company twice. The latest builder who had to give permission thankfully sent an email to the buyers solicitors at no cost, just a lot of stressful phone calls. So beware of these covenants that do not time expire!

Anxioustaurus123 Wed 18-Dec-13 09:25:04

Thanks everybody for replying!!

Currently there's no timeline mentioned in our contracts for these restrictive covenants and we have raised concerns to our solicitors....

If the builders come back saying they cannot provide timeline, would you consider buying a terraced house with such a restrictive covenant?

I am confused about the buy now!!

LIZS Wed 18-Dec-13 09:28:45

Is being able to extend important to you ? tbh no it wouldn't necessarily put me off after all it will equally apply to the other properties. I think the clause is pretty standard but it might be helpful to have an indication of likely fee.

Anxioustaurus123 Wed 18-Dec-13 09:46:17

We wouldn't really be able to extend this property I guess!! But as you said Lizs knowing what the fee will be is good.. I suppose we just like the idea of not being restricted on a freehold property...

It's so stressful waiting for the reply from developers... I just hope we get to hear from them before Christmas!!

2plus1 Wed 18-Dec-13 09:46:23

I have signed this but would like to know likely costs, length of time they would impose this. I would also ensure that when buying this property second hand that all permissions were in writing and transferred to you as the new owner. My sellers did not disclose the conservatory as an addition so the solicitor did not pick up on it, the neighbours confirmed the conservarory addition when I had moved in.

ContentedSidewinder Wed 18-Dec-13 13:47:58

It works in your favour as well though so you can see it as a positive meaning your next door neighbour can't clad their house in some horrendous mock stone.

I believe it was very common in the early 90's with the first market crash where builders wanted to ensure that new owners wouldn't do something to the property that would put off other buyers for the unsold houses.

Being in a row of houses means anything you do affects your neighbours and vice versa.

RunningGingerFreckleyThing Wed 18-Dec-13 13:57:44

The restrictive covenants are enforceable for the lifetime of the property.
If you do carry out works to the property but don't obtain restrictive covenant consent from the developer and go on to sell, you can get retrospective consent or provide an indemnity insurance policy. It covers the cost of restoring the property to it's original state before the alterations were carried out. Do whichever is cheaper. A buyer and their lender should happily accept either.

Anxioustaurus123 Wed 18-Dec-13 14:17:58

So are these covenants only applicable to terraced houses? Semi detached and Detached houses will not have them is it? Any ideas?

Also our contracts state we will have a fixed rental charges of about £2.00 a year and to sell our property we will need to seek permission from Rent charge owner...Has anybody else come across such a charge?

Makes me think are New Builds worth the price at all then?

RunningGingerFreckleyThing Wed 18-Dec-13 14:52:53

Restrictive covenants can be registered against any type of property or land. The particular one you refer you has become a lot more common in the last 30ish years. I think, cynically, it is another form of income for the developers.
The rent charge is becoming quite a common thing where there is allocated parking or communal grounds etc. It's like you're buying a freehold property with elements of a leasehold. As long as you make the payment, probably annually upon receipt of an invoice, it won't cause you any problems whilst you live there or when you sell.

LIZS Wed 18-Dec-13 15:12:42

Can apply to any property , ours was a 4 bed detached built in the 1980s, so even a resale or older property could have one. Sometimes the person or company named is untraceable or gone bust so it is effectively unenforceable but theoretically could be invoked.

MrNorfolk Wed 18-Dec-13 15:22:31

If it is a true restrictive covenant the benefit of it is not personal to the developer. A true restrictive covenant is for the benefit of identified land (and hence the owner for the time being of that land) and burdens the identified land. It gets complicated where the covenant is expressed to be for the benefit of land but consent is required from a named person other than the owner of the benefited land. You need your solicitor to explain this. The drafting in most residential conveyancing is poor and full of issues - most people just take a view.

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