Active discussions

Meet the Other Phone. Only the apps you allow.

Meet the Other Phone.
Only the apps you allow.

Buy now

Please or to access all these features

Talk
Property/DIY

Join our Property forum for renovation, DIY, and house selling advice.

Original poster

Does anyone have experience of restrictive covernance?

41 replies

ozzia · 28/09/2015 20:16

We're 99% of the way through the process and our locum solicitor messed up, not telling us not to contact the covenentee so I did - he knew I was planning to. Now our solicitor is back and can't get us indemnity insurance. Does anyone have experience of just extending houses without telling the company with the covernance?

I'm really angry with the locum solicitor

OP posts:
Kerberos · 29/09/2015 09:30

Can you approach the owners of the house and ask them to knock the price of the restrictive covenant from the selling price? It will also affect any resale value which may mean the house price has alreay taken it into account. Bear in mind it will also affect the resale value for you.

Original poster
ozzia · 29/09/2015 09:38

Yes, that has been a other concern he resale value for us. However, anyone purchasing could get an indemnity policy if they planned to do work and then they'd be OK.

OP posts:
wowfudge · 29/09/2015 09:47

Either explore further and see what you can negotiate with the covenant holder or try to renegotiate with the vendor or walk away. Get advice from your solicitor: it is what you pay them for.

mandy214 · 29/09/2015 09:47

Sorry OP, if it's freehold my post about being in breach of the lease obviously doesn't apply.

Original poster
ozzia · 29/09/2015 10:28

My solicitor has pretty much said if it were him he'd risk building and not telling them. He's also said it's easy for him to say when it's not his risk

OP posts:
wowfudge · 29/09/2015 12:03

Hmm - would you want to risk being slapped with a bill when you come to sell and they see the particulars on the internet? It really does depend who the covenant holder is how up to date they are with works going on in affected properties. Is it really worth running the risk? I think if you want to go ahead you need to renegotiate the price or look at getting the extra finance needed to pay the covenant holder.

ExConstance · 29/09/2015 12:30

Is there a conveyancing solicitor around? I used to be a solicitor but it is yonks since I did any property stuff. OP. If the owner of the benefit of the covenant is easily contactable then I doubt that any insurance company would have issued a policy against liability under the covenant as that would just be a carte blanche to breach it. Insurance is usually used for those cases where the covenant is very old and the owner of the benefit cannot be found. I suspect that in this case a previous owner of the land or property wished to retain a stake in its future development potential.

Original poster
ozzia · 29/09/2015 13:46

Yes my solicitor said that given that the insurance companies usually have no issue with insuring against this company as covenentees it shows that the liklihood is that they wouldn't have a case if they took it to court

OP posts:
Fizrim · 29/09/2015 14:50

We've only used indemnity policies to cover events that have taken place - not future ones. I'm not sure why you would need a policy when you know who the holder of the covenant is and they are easily contactable. I suspect they will charge a lot more for permission if you make the alterations and try to sell as then it will be an issue.

Original poster
ozzia · 29/09/2015 15:36

We're going to apply to have the covernant removed. After a bit of research I've found that this should be possible under current law, although they may contest it they probably wouldn't have a leg to stand on

OP posts:
Imperialleather2 · 29/09/2015 19:12

Seriously ozzia I think you'll rack up more than £2k in legal fees! And the time involved......

Personally I would approach them with an offer for a deed of release without uplift.
and see what they say.

The person with the benefit of the covenant clearly has an enforceable interest so will want compensation. Removal is really for situations where the covenant is obsolete or the person with the benefit is untraceable.

I'm a commercial property solicitor specialising in development and we have never in 10 years of practice been successful in getting one removed.

atticusclaw2 · 29/09/2015 19:26

£2k is about 7 hour's work for a typical lawyer (including the vat). It'll undoubtedly take more than that.

unadulterateddad · 29/09/2015 20:43

I've done quite a lot of work on covenants in my time and it usually costs £30-50K in solicitors costs to get one removed and that is only in very specific circumstances which are particular to that property. The type of covenant you are talking about is very unlikely to be removable and I've dealt with a couple in the last couple of years - both times it involved significant payments to the holder of the covenant to allow works to take place. Now they are aware of the works it is highly likely they will check to see if works have been done

unadulterateddad · 29/09/2015 20:44

so I don't suggest trying to hide it from them in the hope they don't notice...

Original poster
ozzia · 29/09/2015 20:50

OK. Thanks all. They don't actually have the address of the property we are buying so not sure they would know to check.

Given the way the covernant is written it doesn't actually cover a lot of the work we wish to do so. It covers "erections" and our main plan is a loft coversion

We won't bother trying to have it removed if you think that's not feasible

OP posts:
Original poster
ozzia · 29/09/2015 20:54

Dp, solicitor and ddad were happy so we've exchanged contracts so just have to see what happens I guess

OP posts:
New posts on this thread. Refresh page