Restrictive covenants help

[Roowig2020]

Hi,
Can anybody give advice on restrictive covenants? We're in the process of selling our house. One of the enquires flagged up by buyers solicitor was something in our deeds we did not know about. We've lived in this house for 14 years.

We extended last year and got planning from local council, building regs, party wall agreement for the works.

We did not, as has been flagged up get 'Covenant consent'. Can we get this retrospectively? Should we be worried?

It also talks about not erecting outbuildings without consent of the corporation- we built a shed 12 years ago- does this count as an outbuilding.

Any advise would be appreciated! My solicitor wasn't available when I call this PM.

Your solicitor can advise on this, you’ve two other options get indemnity insurance or have the covenants removed as no longer valid. The former is the cheapest and quickest.

Or yes, you can ask the covenant holder for approval but that is going to be risky,

Thank you. We sent the title deeds to the solicitor so I can't even look at them in detail to see who the corporation is. The house is almost 100 years old though and freehold and this was never flagged up when we bought the house.

I will have a look into indemnity insurance.

Is the shed a regular wooden one? Can't see anyone arguing over that, but I've read a LOT of strange covenants in my years (one place I lived I wasn't allowed to keep chickens but I could have a goat. Also no rotary washing lines)

If it’s a hundred years old and more than a year since the work was done (I think that’s the time) you can get covenant (indemnity ) insurance, it’s not expensive, and basically insures that if the covenant holder finds out and take action, costs are for the insurer,,,which is unlikely for them to find out and take action, since it’s so old. You can also apply as said to have them removed as no longer valid but that’s costly and time consuming.

Your solicitor will walk you through it,

Yes extension work is over 1 year old.

The shed is a metal one, will that make a difference? It's easily dismantled though if we have to.

Yup just sort indemnity insurance; (I took it out for current house for a restrictive covenant, cost £80) your solicitor really should advise/sort the next steps.

Thank you all who responded. Spoke to solicitor today and they had already looked at costs of indemnity insurance (£200). They didn't seem concerned- phew!

I had these on a house I’ve been buying (or not, whole other story) - I contact the council for advice and they told me the covenants had been changed in 1991 and they no longer applied them to houses older than this. They sent me proof and that satisfied the solicitor so no indemnity needed!

That's interesting. Was it your specific council or all councils?

I got in touch with the local council for the house I was buying (different district to where I am now), because my covenents said I couldn’t erect any buildings outside, park on the driveway or cut any bushes without permission! And I was planning on building work when I moved in anyway.

Word for word, they said
‘I write to inform you that the Housing Committee agreed in 1991 to delete and amend various covenants contained in the Right to Buy Transfer. Please find attached details of the deleted and amended covenants.

It was further agreed that in order to ensure consistency conveyances completed prior to the decision date should be treated as though they had been amended in the manner outlined.’

As said earlier you can get covenants removed as the pp has had happen, but I understand it’s costly and takes time, your solicitor can advise. Obviously cor that poster someone did it already, but generally these things are only still in place because no one wants the hassle of getting them removed. Indemnity is the quick and cheap solution.

@Bluntness100 We've agreed to pay for the indemnity as we're due to exchange contracts in two weeks so we'll take the easy route for now.
Good to know for the future @dizzyupthegirl86 if I come across this again.

Even if you contacted the covenant holder they are unlikely to refuse permission, they just charge more for retrospective permission than if you'd asked beforehand. This may sound a bit of a money-making scheme but I couldn't possibly comment.

Just to add a word of warning, you cannot take out an indemnity policy if you've already alerted the beneficiary of the covenant to a potential breach.
Anyone thinking of doing any research or chatting to the party who has the benefit of the covenant should bear in mind that they may then be forced to go through a formal process, with associated costs, as no indemnity would be available.

Update: so our buyers are really concerned (freaking out) about this Covenant and think that the best solution is for us to go back to the covenant holder and seek retrospective agreement, even though solicitor acting on our behalf has already sorted indemnity cover.
My solicitor was quite unconcerned about this when I relayed what buyer had communicated (buyer emailed me directly). Now I'm really worried- arghh and waiting on solicitor getting back to me.

But your buyer will have to put the request through their own solicitor, not directly to you.
Their solicitor will tell them they're talking rubbish and to accept the indemnity policy.

@DameCelia they have spoken to their solicitor and the latest (that my solicitor communicated to me) was that they want time to think about it. I really hope you're right and they accept the indemnity insurance as I can't bear the thought of this not proceeding. We're moving countries with new house, new jobs (given notice on current jobs) , schools etc lined up so I'm really worried!
Is this thing pretty common then?

Ime it's rarer to find a property without a restrictive covenant than with one, but that may be because most of my experience is with new builds or larger, older properties.
It would have been visible to you when you purchased the property, but depending on who did your conveyancing you may have been sat down and had it explained to you (if you paid a solicitor) or you were told to 'read the title document and satisfy yourself that the covenants do not affect your intended use of the property' (if you used an online bulk conveyancing company).

You also need to factor in that their mortgage lender (if they have one) will need to be happy with the policy. But it would be unusual for them not to be.

@DameCelia
dh and I were oblivious to this restrictive covenant until this week. We bought 14 years ago in our early 20's so we must've been very trusting or stupid! we were just saying last week how awful previous solicitors were compared to current ones. I can only think that the solicitor kept it low key and advised us it was sorted. We didn't even realise until this week that previous owners had taken indemnity insurance for us when we bought as they had unknowingly replaced windows and built a conservatory without getting permission from the corporation.

I hope we hear today otherwise it's going to be an anxious weekend.

Hi op

Most solicitors will tell you that they could paint the restrictive covenants in six foot high neon letters across the front of the property and owners would still be surprised by them when they come to sell!!! You are not alone.

Your mortgage lender was happy with the indemnity policy when you purchased, your buyers' lender should also be happy.

Of course, if your buyers are planning to carry out work on the property themselves they are unlikely to buy something with a covenant meaning they need permission, and have to pay for it, particularly if applying for permission means drawing attention to the previous owners' breach of that covenant.

Remember, indemnity covers the costs of dealing with the breach, worst case scenario is having the extension removed (although chances of that are vanishingly small) . It doesn't give a free pass to keep whatever is now there.

I would tell your agent to let the buyers know it is going back on the market, along with a shiny new indemnity policy.

I've just re-read my post, it is not meant to be that pessimistic!
Good luck.

@DameCelia
Thank you for the info. Buyers want the weekend to think. Will hear tomorrow either way but I don't have a good feeling. It's so stressful!

Buyers pulled out of purchase. We are devastated as our relocation was riding on this sale. Worst part was the buyer contacted us this evening, assuming we'd been informed today, even though I spoke to my solicitor this morning. This morning Solicitor reassured me that buyers wanted a bespoke indemnity policy to proceed, which they were obtaining quotes for.

Not sure where that leaves us in terms of selling our house. So many questions for my solicitor tomorrow morning......

Oh no, sorry to hear this - were they FTB? I hope another buyer turns up very soon - if you need to relocate can you rent out the property for a bit instead (and rent somewhere in your new location, we ended up doing that).