Restrictive Covenant

[Papillon33]

Hello,
We're in the process of selling our house, and buying closer to where my family are. The house we're in the process of purchasing isn't in our ideal location, but it seems we've probably been priced out there. We need a three bedroom place, with a space for working from home. The house has a garage that's been converted into an office, so it seemed to be ideal, but our solicitor has noted that the house is subject to a Restrictive Covenant which states that the garage must remain a garage. Just wondering if anyone has experience of this situation from either side, if the Restrictive Covenant is ever likely to be enforced, or if a similar covenant has caused problems when selling on in the future?

Would an indemnity policy cover it? We recently purchased a house that has a covenant whereby anything that requires planning permission also has to be approved by the original developer. Searches showed that something had been built without this and we had to pay for an indemnity policy. Not sure if it's the same principle?

@MrsHemsworth thank you for responding, I think there is a type of indemnity policy we could get. It's quite frustrating because I'm getting the impression the sellers knew that this would be a sticking point and have been trying to cover it up until it came up in our solicitors searches (which it inevitably would). Buying a house is such a huge thing, and the adverts can be so misleading / ambiguous in ways like this 😭

@MrsHemsworth our solicitor has said that he actually used to work for a developer and had to go round these developments to check if people were converting garages / building extensions. He said that the indemnity policy would cover us for removing the home office if it came to it, but we would still be in breach of the restrictive covenant so could be liable to pay a fine. I don't know if it's just that our solicitor is particularly hot on this, and it's something that never happens in real life, or if it could be something to worry about

I completely agree with you, it's very frustrating. We had plans to put an extension on this property and didn't find out about the covenant until we received the solicitor's bundle about 2 weeks before we were due to exchange! By that point we were totally invested in the property and were 4 months down the line so we went ahead.

It might depends on when the convenant was put in place and by who.
So usually it's the house builder/developer but it can also be the local planning authority as they class a garage as a parking space and usually there has to be X amount of spaces per house.

If the owners have converted the garage then an indemnity will give you the protection over any enforcement of the convenant being enforced.

But if the house was built 30yrs ago and the garage converged 10yrs ago for example then highly unlikely it would ever be enforced.

But if it's a new build only built a few years ago then it might be different.

Your solicitor should be able to advise.

I would insist on an indemnity. This is usually transferable when you sell the house in the future.

I would ask the estate agent how much the value has increased from having the home office verses the garage and I would be trying to chip the price. They should also cover they cost of the indemnity insurance. The people we purchased our house off were lawyers and they paid our indemnity insurance (circa £800). Ours wasn’t related to restrictive covenant but it’s a similar principle.

Lots loose value by doing this

Can you contact the local planning department and ask there advice. We sold a house with a very old extension that had never had pp as it was single skin and built ages ago, it also had a lean to which we turned into a conservatory and the buyers solicitor made quite a big song and dance about it all. We got a letter frpm planning to state that they were permitted developments.

I know sometimes retrospective planning can be granted.

Just a thought but does it still look the same from the front with a garage door because sometimes that is allowed as well. Best to check with planning as it may be within permitted development rules. We were allowed to convert ours as long as it had a lockable fire door between the garage and the house and it isn't used as a bedroom or kitchen.

We weren't allowed to alter our property within X number of years (can't quite remember how many) without permission from the original builders. We did convert our garage to a room but had to get written permission from the builders.

Is it possible to get permission from the builders/removal of the covenant - especially if the development has been there for a number of years.

I wouldn't contact planning as I believe you can't take out indemnity insurance if they are aware of the issue.

You don’t need planning permission for converting a garage to a usable room. External changes may need permission. That said, this query has nothing to do with planning and the planning department have no control. It’s a restrictive covenant, therefore a legal right on the title. This is much more serious that planning and the person with the right could ask you for a financial amount to remove this right. It’s likely they won’t and it’s a dormant restrictive Covent and but all it needs is for someone to decide they are checking on all of their legal risks against developments they built or bought the rights on for it to become an issue. That’s why you take the insurance. The worst case is they don’t allow you to remove the restriction so you’d need to convert it back to a garage (or they may sue you - doubtful but that’s the route). That’s why I’d see if it effects the value of the house to have it as a garage rather than study and seek to negotiate it down!

@greenbirdsong thank you for responding. The house is 8 years old, and the current owners (who bought it brand new) haven't confirmed when they had the conversion done, but we've just received their property information form and it says that the building "can easily be converted back into a garage", so it looks like they were aware this could be an issue. The thing is, the office was one of the main attractions for us, so I don't like this situation.. we'd definitely ask them to get the indemnity in place.

I get the feeling the solicitor doesn't like the situation at all, but he can't outright tell us to pull out, just give us the information available. Maybe it will be fine, but maybe it won't.

When we went to view the house it was very noticeable that there weren't any vehicles parked in the street, and now it's clear that this is because everyone else has a garage and a driveway parking space. So I can see why the rule is there, to keep the narrow twisty road as free from parked cars as possible.

@kaleidoscope123 @MozerellaSalad this is a very good point. The seller dropped the price by 10k a couple of weeks before we saw the house, but the estate agent ad still says "garage converted into an office", so I don't like the fact we would be buying it when there is the potential we could be asked to change it back into a garage (and it's technically possible we could be fined by the developer for breaking the covenant). I would expect a garage converted into an office to be a permanent fixture if that's the way it's sold. I don't think I trust the estate agent to be honest about this situation, or to give us the full story.

@WonderingWanda the situation your describing actually sounds really similar to our current property. We bought 4 years ago, and found there was an extension in the early 90s that was very similar. We just needed to get an indemnity policy for that, and we've been really open about the situation with our buyers now. As @TulipsfromAmsterdam said, we were told by our solicitor at the time not to contact planning so that we would be able to take out the insurance.

The garage does still have its original door, with a bit of storage at the front, and about 75% has been converted into an office. It's been done really well, space for two people to work plus space for their Peloton bike and treadmill 🤩 but it's not a planning issue, the covenant is from the developer. I think the issue is the loss of the parking space

@bigbluebus it sounds like a similar situation. There are other clauses in the covenant that have a 10 year timespan, but this particular clause seems to be open ended, and the house was built in 2014 so still within the 10 years anyway.

I wouldn't want to go to the developer about this because it could completely screw over the seller - the developer might just say it's fine, but on the other hand they could tell the seller to restore the garage immediately and could even issue a fine. I really wish the seller had done as you've suggested in the first place, but it doesn't seem to be the case, or they would have produced the confirmation from the developer straight away. I guess there's even a chance they did go to the developer and were told no.

There are one of two reasons IMO:

• restrictions on car parking so the council have insisted on this.


• the garage has not been built to living space spec, e.g. insulation etc.

In the former, the convenant will help with legal costs etc but not the loss of the room should it be challenged. In the latter case, I wouldn’t proceed if you need that room. A full structural survey will help but tip them off to look closely.

Have just remembered that we did write to the planning department (with a rough sketch) when we did ours. They did confirm we didn't need to apply for planning permission but it was a condition that we retained 3 parking spaces (4 bed house) which we could do as we had a double width driveway plus another garage (they count a garage as a parking space even though most people couldn't get their car in it). We did however, have to get Building regs approval and pay a fee for that.

@NewHouseNewMe we've had a survey, but they weren't given access to the garage / office 🙄 it did ring alarm bells for me when I noticed that they'd included the floor area of the office in the total floor area in the estate agent's ad, but the area isn't included in the EPC.

I'm assuming the covenant probably is due to a planning requirement from the local authority that each dwelling should have an appropriate number of parking spaces to avoid on-road parking.

I feel we've been misled about the house having a permanent office space, and there's a real chance that we wouldn't be able to claim it's an office space whenever we go on to sell in the future.

@bigbluebus that's very interesting. I bet in our case there was a local authority requirement that the new houses should have an appropriate number of parking spaces. I think for this three-bed house the requirement would be two off-road spaces, and without the garage this property would only have one off-road space.

I've just been looking into restrictive covenants due to an issue with our neighbours. Restrictive covenants and planning are two different things. Planning don't get involved in enforcing them. I rang them to check this in the week.

RCs can usually (depends on the wording) be enforced not just by the original party but also by x number of neighbours. So for instance the original party to the restrictive covenant on our property no longer exists but all of our neighbours could enforce the terms if the covenant should they choose to. The solicitor I spoke to said that's generally how RCs are worded (ie that the neighbours can also enforce).

@Covenants1234 thank you for this! That's very interesting. The developer that put the covenant in place is building more houses just round the corner at the moment, so they are still around, and what you say about neighbours being able to enforce the covenant does worry me. The fact we noticed no one else was parking on the street suggests maybe someone could feasibly decide to enforce it in the future. We only have one car, so it may not be an issue for us, but could be an issue in selling it on later. We're waiting to hear back from our mortgage advisor if it would be an issue for our lender.

My partner thinks we should cut our losses and pull out of the purchase. It's still quite early in the process, and our solicitor said something to him like "i wouldn't want you to end up wasting extra money paying for my time with other searches", so it seems he thinks we should pull out.

Are there restrictions in place about not parking in the roads? If there are it's much more likely to be an issue for the neighbours either now or in the future that you only have 1 space due to the breech of RC. Is it possible to get a realistic comparable price on a house without the conversation and did you have a valuation as part of your survey? If the conversation wasn't seen during the survey then the valuation should include it as a simple garage, if you haven't already done so check that. I would be inclined to go with it if the indemnity policy is paid for by the seller and you aren't paying more than the equivalent house without the conversation. That way your risk is someone enforcing the RC. If you go ahead then I'm presuming you would obviously act differently as a seller and not try and pass off as a conversation but price as a garage.

The fact they wouldn’t allow your surveyor to inspect the garage and that it isn’t listed as habitable space by the energy inspector makes me think that the issue is structural. I can’t say what that is - insulation, ventilation etc. - and of course building control have not signed off.
I would personally walk away. I would never buy a house with an unrecognised or disputed extension and I write that as someone who has currently no roof!

RCs and planning are separate, but I suspect if the RC exists it is in response to a condition restricting the conversion of garages imposed on the original planning permission.
If this is the case, an application should have been made to the LA seeking the relaxation of this condition. If the work has been carried out in breach of this condition, the council can take enforcement action unless you can prove that the breach has occurred more than 10 years ago.