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Original poster

Legalese - what law is this?

13 replies

WinkyWinkola · 22/02/2013 20:52

If I buy a property with land, develop it and make money on it, the previous owners can demand a % of the profits off me if they've put a covenant on the land.

What's this law called, please and are there any exceptions? Without getting too complicated!

Tia.

OP posts:

Talkinpeace · 22/02/2013 21:06

my house has a subdivision covenant - to split the plot involves a high court approved ruling - hence why developers backed off
worth checking the covenant vs the profit - often worth it ....

lalalonglegs · 22/02/2013 21:11

I've come across this once or twice in auctions, it's not so much a law as greed. I have wondered how it would be enforced .

Talkinpeace · 22/02/2013 21:14

lala
I deal with Parish Councils and planning - those covenants are set in stone - you either buy out or pay an annual wayleave
they are integrated into planning law

SingingBear · 22/02/2013 21:15

This reply has been deleted

Message withdrawn at poster's request.

MikeOxardAndWellard · 22/02/2013 21:19

It's nothing to do with planning law, it's a totally separate thing. As singingbear says, it's a type of covenant.

lalalonglegs · 22/02/2013 21:32

talk - I absolutely bow to your expertise and I did misread the OP and thought it was a house rather than land: it would be hard to argue that if you sold a wreck and the buyer did it up and made it lovely, you deserved a share of the increased value, although I did come across a flat at auction where the seller expected this. a covenant against subdivision is slightly different as it aims to maintain the character and density rather than make a profit from someone else's enterprise. If you want to develop land (or property), then do it, don't try to get someone else to do all the work for you and then hold your hand out. Why not just sell a house and come back in 20 years' time and demand a share of its increased value? It makes no sense to me.

Original poster

WinkyWinkola · 22/02/2013 21:41

See lala, that's what I don't get.

We're looking at a wreck of a house. It's got about 3 acres of land 3 barns on it. All in poor condition and would need a lot of work to make them of any use.

But it would seem the owners want to sell it with such a covenant on it.

It does seem greedy and unfair that we would take all the risk and sweat and all they don't even own the land any more but still get money.

Please explain it to me - I need to learn more evidently.

OP posts:

Talkinpeace · 22/02/2013 21:42

springbear and mike -when dealing with the lds and ppg documents for areas, covenants are taken into account - something that city dwellers (ie most politicians and whitehall civil servants) would not recognise if it hit them round the head

MikeOxardAndWellard · 22/02/2013 22:00

No that's bollocks. This kind of covenant would have no effect on planning policy or guidance documents. It just would not be relevant in planning.

lalalonglegs · 22/02/2013 22:07

I'm with ya, Winky.

Talkinpeace · 22/02/2013 22:11

mike
sorry to disabuse you but when the local plans for areas are drawn up, housing density calculations most definitely take into account the subdivision rules on plots

my council actually - quite openly - looked into breaking the covenant on my garden, and because they would get the density amended from 5/ha to 140/ha it was worth going to privy council for the 20 houses, on condition all of us owners signed the same sheet.

without that legal judgement it all went pear shaped and the density allowances for nearby areas were raised due to the 'green space' of my garden.

Sausagedog27 · 23/02/2013 08:06

Can I just say I agree with Mike. Covenants have no bearing on planning law, planning decicisions etc. They are totally unrelated and are a separate process.

covenants are a separate civil matter- it may be that the council backed away from allocating the land for housing to avoid this seperate legal process, particularly when there are other readily availible sites for development. But they are certainly not taken into account as part if the planning process- planning departments simply do not have the information on every property deed for houses in their area.

People can often confuse covenants and planning conditions placed on an approved decision- I.e. removal of permitted development rights etc.

LavenderBombshell · 23/02/2013 12:05

Winky,

I looked (well on the internet ) at a house which looked like this . Land outbuildings and small farm house. A doer upper but looked very cheap for where it was and what you were getting . There was a similar condition on it which I assumed was why it was cheap. It hung around for a long time on the internet. So , a totally uninformed (legally) view but I have seen such a thing. If yours doesn't look like there is an immediate purchase price incentive to make up for the covenant I wouldn't be able to see the attraction and move on. I just wouldn't like to think someone else had a claim on my property , regardless, and so wouldn't buy anything like this .
For legal advice I am afraid you must look elsewhere !

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