Restrictive Covenant

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  • Restrictive Covenant
  • Premier Icon footflaps
    Subscriber

    ‘this dwelling must not be used as a private dwelling house without consent of the local authority’.

    If it’s been used as a private dwelling for N years without the LA complaining, it has consent by default…

    sc-xc
    Member

    Thanks footflaps…I could do without forking out for more insurance!

    swamp_boy
    Member

    I had to get one once. It is a one off payment IIRC about 1% of the property value and covers your legal costs if anyone takes it on themselves to invoke the covenant. I wouldn’t have bothered but the buyer’s lawyers were being difficult and it got the sale done.

    The wording of yours looks as if you are Ok as long as you have the local authority’s consent and they have evidently been allowing it to be lived in. It might be worth getting something in writing from them if that would negate the covenant.

    Nipper99
    Member

    No such thing as consent by default.

    It sounds very much that this relates to a notice served by the local authority when the building was condemned – not a restrictive covenant in the normal sense of the word.

    I purchased a building for a client recently that had such a notice but it was in one of the schedules to the local searches.

    You can either ask for the seller to provide the policy (they may already have taken one out on their purchase and they generally last for the benefit of successors in title) or ask your solicitor to do his job properly and identify the entry and ask the local authority to remove the notice.

    Premier Icon sandwicheater
    Subscriber

    If you do speak to the council, the indemnity insurance would be null and void. May be worth chatting to the other owners see if someone has asked previously?

    sc-xc
    Member

    Hmmm, thanks.

    I may give the council a call and speak to someone there. I’ll update you all!

    nickjb
    Member

    I may give the council a call and speak to someone there. I’ll update you all!

    Just to reiterate sc-xc’s point once you speak to the council you will not be able to get an indemnity policy. Its an either/or thing. TBH getting it sorted with the council is the right way to go but an indemnity should be cheap (although may be worthless). Tricky decision. My gut feeling would be that if nothing has happened in the last 40 years its unlikely to happen now but its not my money.

    Premier Icon tomd
    Subscriber

    Presumably the council has been charging and collecting council tax on it? I would have thought that has some bearing.

    antigee
    Member

    Nipper99 – Member
    No such thing as consent by default.

    It sounds very much that this relates to a notice served by the local authority when the building was condemned – not a restrictive covenant in the normal sense of the word.

    not a solicitor but my inclination is Nipper99 is correct – double check with solicitor it is a covenant and can be covered by insurance – had something similar where the LA had taken the owner to court because property in disrepair, sorted but the record still existed as a charge on the property

    as to dealing with LA’s probably harder due to lack of resources but bought one house where deeds showed highway authority owned a third of front garden – dated back to road widening plan 40 years prior LA responded promptly with no interest letter

    sc-xc
    Member

    We are buying a house – old cottage from 1790. During the 1970s it was derelict and condemned. In 1978 it was bought by a builder and fixed up.

    The solicitors have sent a load of paperwork through, and the deeds (dated 1978) have an entry under restrictive covenants stating something like ‘this dwelling must not be used as a private dwelling house without consent of the local authority’.

    Since 1980 it has been occupied (they all have, it’s the end of a terrace of 7). In the mid 1980s it was extended, and other conveyancing documents we have been sent reference the fact that this is a private dwelling house.

    Our solicitor is saying that if we may need an indemnity policy. Does this sound right? Presumably if there was an issue, this would have been picked up in the last 37 years every time one of the cottages was bought/sold?

    Any advice?

    thecaptain
    Member

    Find out what the indemnity would cost. My bet is it’ll only be a couple of hundred quid, unless that breaks the bank I’d just pay it and forget it. We’ve got a couple for our house, different issues but similar principle (planning and freehold issues). I think solicitors have only got keen on these in recent years, hence might not have been an issue in previous sales.

    You could waste a few weeks going back and forth with seller but easier to just pay up and get on with it. You might need to do it for a mortgage even if you don’t think the risk is significant yourself.

    Premier Icon aracer
    Subscriber

    I’m not an expert, but ISTM that in the current planning climate the local authority aren’t going to deny consent provided the building meets relevant building standards (and if it doesn’t do you want to live there?) The only obvious reason for such a clause is to ensure that it did meet such standards following renovation from a derelict state.

    poly
    Member

    I would take the view that they are selling it as a dwelling therefore the burden is on the vendor to prove that this restriction no longer applies. They should have spotted it when buying themselves. They may even have done so and have some paperwork that shows its a non issue. I’m not too familiar with indemnity policies, but I can’t see why you couldn’t take one out, if the vendor attempts to source the consent and fails. Personally if I had to take out an indemnity on something the vendor should have done the cost would be coming off the price (which is why it would motivate the vendor to sort it now).

    Premier Icon eddiebaby
    Subscriber

    Not the sequal to Alien Covenant?

    Is disappointed.

    Premier Icon jam bo
    Subscriber

    if its needed, i’d be expecting the vendor to pick up the tab for an indemnity policy.

    Premier Icon grumpysculler
    Subscriber

    My bet is it’ll only be a couple of hundred quid, unless that breaks the bank I’d just pay it and forget it.

    And this is how money is made…

    Many of these indemnity policies are useless because the risk they insure against can’t happen (but others are not and really are useful). Taking out an indemnity policy has become an easy route to dealing with many non-standard issues.

    Any advice?

    You are paying a legally qualified individual with full knowledge of the title deeds, wordings and local conditions. So lets ask a bike forum for advice…

    Sounds like the seller should provide evidence of the local authorities consent to me!

    mt
    Member

    ” I wouldn’t have bothered but the buyer’s lawyers were being difficult and it got the sale done.”

    This is what happens when a purchasers solicitor can actually do there job properly.

    squirrelking
    Member

    What grumpy says. You are paying a solicitor to do a job, let them do it.

    Premier Icon jambalaya
    Subscriber

    We paid for indemnity insurance on a house, from memory we had to only pay for a few years as there was an implied (but not explicit) time limit on the covenant. You should get some proper advice.

    Rockhopper
    Member

    Apply for a certificate of lawful use.

    Premier Icon jerseychaz
    Subscriber

    IMHO these indemnity policies are a complete scam – the solicitors get a commission on the policy sale and no one claims on them – Chancel Insurance being a prime example. I’ve had issues where a buyers solicitor has asked for a policy – we’ve told them to either read all the documents properly or buy their own and on buying my solicitor has suggested one may be necessary – we’ve told the vendor to either provide a policy or resolve the issue – usually get the issue resolved – either way I wouldn’t provide profit for any of these chancers!

    Greybeard
    Member

    in the current planning climate the local authority aren’t going to deny consent provided the building meets relevant building standards

    If it was built in 1790, it probably doesn’t meet current Building Regulations, but it doesn’t have to. They only apply at the time of building or major refurbishment – it probably had to comply comply at the time of the work in 1978. While a covenant is legally separate from planning permission, if there is planning permission for it to be used as a dwelling, that might be evidence that the LA consent to such use.

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