Covenants

[transatlantic]

I'm in the process of purchasing a house, and a clause has been brought to my attention by my solicitor which prevents extensions or alterations or the erection of any buildings on the property without the consent of the person or organisation who has the benefit of the covenant (which will include a fee).

I have no plans to have any extensions or new buildings built, but do plan on knocking down interior walls, so will have to investigate whether or not that comes under the clause.

Apparently, this is pretty common, but it seems open to obuse? I mean, whats stopping the developer from charging something rediculous for that aproval fee? Could it be hundreds or even thousands?

And when I come to sell, is it going to put buyers off?

I will of course be discussing this with my solicitor, but wondered if anyone had any exerience with this?

 

[RogerP]

I'd steer clear of house that is subject to a covenant or at the very least would want it much cheaper than a like property without the restriction. I was in a similar situation years ago but I bought where I am now instead. The property with a covenant stayed unsold for a very long time.

 

[AJB Temple]

Restrictive covenants can sometimes be bought off. This is particularly the case if the covenant holders have no further interest in the site or adjacent premises. It is worth enquiring. The covenant as described is very restrictive and I would ask what the fee would be for unfettered development and alteration, then adjust my offer price accordingly and obtain the release (Which I would want in perpetuity). I would be unlikely to buy a property where I could be held to ransom on this in the future.

 

[Lons]

I'd steer clear of covenants as well unless resolved before purchase, they aren't uncommon though. In some ways leasehold properties used to have / may still have a kind of covenant as many require permission for a fee before extensions can be built. Some mortgage lenders used to insist as well as they were anxious nothing would be done to devalue the property thereby putting their investment at risk.

I bought a 3/4 acre field off the back of my house 23 years ago and had to agree to a covenant giving the seller a % of the increased value if I obtained planning permission an built on the land, I agreed to a period of 20 years so not an issue for me as I could plan for the end date and now expired but that's a little different to your problem.

Bob

 

[bugbear]

I bought a 3/4 acre field off the back of my house 23 years ago and had to agree to a covenant giving the seller a % of the increased value if I obtained planning permission an built on the land...

That's common - a sort of claw back provision.

BugBear

 

[stuartpaul]

I'd steer clear of house that is subject to a covenant or at the very least would want it much cheaper than a like property without the restriction. I was in a similar situation years ago but I bought where I am now instead. The property with a covenant stayed unsold for a very long time.

I find that a bit of a sweeping generalisation. Many properties have innocuous covenants the most common being in relation to hanging washing at the front of the property! Others of course have significant restrictions.

We're just about to move to a bungalow built in the mid 90's and it has this very covenant.

You're doing the right thing in getting it checked out by your solicitor.

 

[transatlantic]

I'd steer clear of house that is subject to a covenant or at the very least would want it much cheaper than a like property without the restriction. I was in a similar situation years ago but I bought where I am now instead. The property with a covenant stayed unsold for a very long time.

I find that a bit of a sweeping generalisation. Many properties have innocuous covenants the most common being in relation to hanging washing at the front of the property! Others of course have significant restrictions.

We're just about to move to a bungalow built in the mid 90's and it has this very covenant.

You're doing the right thing in getting it checked out by your solicitor.

It's worried me even more now as I have read that mortgage lenders can refuse applications based on this issue.

hopefully I can get this whole thing sorted when I speak to my solicitor (at the time of writing, it's a bank holiday)

 

[Lons]

I'd steer clear of house that is subject to a covenant or at the very least would want it much cheaper than a like property without the restriction. I was in a similar situation years ago but I bought where I am now instead. The property with a covenant stayed unsold for a very long time.

I find that a bit of a sweeping generalisation. Many properties have innocuous covenants the most common being in relation to hanging washing at the front of the property! Others of course have significant restrictions.

We're just about to move to a bungalow built in the mid 90's and it has this very covenant.

You're doing the right thing in getting it checked out by your solicitor.

That's perfectly correct of course and remiss of me not to mention. I was however responding directly to the OP situstion.

EDIT: Just realised you weren't resonding to my comment! :lol:

 

[Benchwayze]

My house has a covenant placed on it.

I can't brew beer for retail purposes. (The land was the property of Ansell's brewery, before my house was built. ) But as I only ever made beer for my own consumption, no problems!)

 

[Wuffles]

I'd steer clear of house that is subject to a covenant or at the very least would want it much cheaper than a like property without the restriction. I was in a similar situation years ago but I bought where I am now instead. The property with a covenant stayed unsold for a very long time.

I find that a bit of a sweeping generalisation. Many properties have innocuous covenants the most common being in relation to hanging washing at the front of the property! Others of course have significant restrictions.

We're just about to move to a bungalow built in the mid 90's and it has this very covenant.

You're doing the right thing in getting it checked out by your solicitor.

It's worried me even more now as I have read that mortgage lenders can refuse applications based on this issue.

hopefully I can get this whole thing sorted when I speak to my solicitor (at the time of writing, it's a bank holiday)

Bad or irksome news about a property purchase or sale only ever arrives on a Friday afternoon. Hope it gets sorted to your satisfaction today.

 

[Lons]

Bad or irksome news about a property purchase or sale only ever arrives on a Friday afternoon. Hope it gets sorted to your satisfaction today.

Isn't that the law of sod for everything though.

Always a weekend when you feel ill and the docs are shut, the car breaks down or worse a machine in the middle of an inportant project and you can't get the part.

One of our early house moves was very stressful when at 12 noon on the Friday we were due to move into our new house, our buyers failed to come up with the rest of the money which of course we needed to complete on our purchase. Panic and had to pull a lot of strings to get a temporary bridging loan just in time as the removal guys were sitting outside the new house and we couldn't get the keys. The buyers of course paid the interest but I said never again would I move on a Friday.

 

[Wuffles]

Bad or irksome news about a property purchase or sale only ever arrives on a Friday afternoon. Hope it gets sorted to your satisfaction today.

Isn't that the law of sod for everything though.

Always a weekend when you feel ill and the docs are shut, the car breaks down or worse a machine in the middle of an inportant project and you can't get the part.

One of our early house moves was very stressful when at 12 noon on the Friday we were due to move into our new house, our buyers failed to come up with the rest of the money which of course we needed to complete on our purchase. Panic and had to pull a lot of strings to get a temporary bridging loan just in time as the removal guys were sitting outside the new house and we couldn't get the keys. The buyers of course paid the interest but I said never again would I move on a Friday.

Absolutely. The place we're in now we were forced to move into "under licence" for the weekend which we found out after posting the keys to the old place through the letterbox after vacating. Our mortgage company needed (at the last minute) a signature from the valuer - who'd vanished, naturally. They'd been asking the conveyancers for it for a while, they said.

Santander & the conveyancing solicitors both paid me what it cost to do this to cover the financials plus the stress and hassle, so in the end I was up on the deal - had to fight for it though.

We also had an email sent to us at around 4pm on a Friday that could have collapsed the sale on another property once upon a time. No idea why, but we picked that up and were able to drive to another solicitors to have some paperwork countersigned. Who emails about something that important and time critical?! Conveyancers do.

 

[Droogs]

We have a covenant on our 7m x 5.5m garden. We can run a steam engine to power a bakery or a tailors, and I can't sell fish from my front room.

 

[Wuffles]

We have a covenant on our 7m x 5.5m garden. We can run a steam engine to power a bakery or a tailors, and I can't sell fish from my front room.

FFS. Really?!

 

[Phil Pascoe]

I ran an off licence for six years that had a covenant on it forbidding the sales of alcohol.

 

[Lons]

I ran an off licence for six years that had a covenant on it forbidding the sales of alcohol.

:lol: :lol: :lol:

 

[Droogs]

@phil.p really it's pretty wierd there are all sorts of inhibitions as the original land owner was a crazy scottish lord who sold th eland to a workers coop. can't use the steam engine for anything else though, was told it meant I couldn't even have a steam powered train set in the garden

 

[whiskywill]

My house has a covenant placed on it.

I can't brew beer for retail purposes. (The land was the property of Ansell's brewery, before my house was built. ) But as I only ever made beer for my own consumption, no problems!)

My local pub closed down when the landlord retired. He bought the building at a reduced rate off the brewery with a covenant attached to prevent him opening again as a pub. A couple of years later, after the involvement of CAMRA, the covenant was removed and he reopened as a free house.

 

[Phil Pascoe]

Years ago a building was worth more as a pub than as a house and the breweries didn't want a good landlord opening up in opposition.
Now many pubs are worth more as houses.

 

[kdampney]

I'm planning on building a workshop in our back garden, but we have a restrictive covenant preventing new buildings and dwelling places on the property, unless we get permission from the original owner's surveyors. Given that the house was built in 1935, and the builder and surveyors are almost certainly dead or difficult to trace, I'm not overly worried about it. Never mind planning permission or building regs, I think that alone would mean every greenhouse, shed or wendy house in our street was in breach!

However, if you're worried about it, you can get indemnity insurance to protect you against costs, if those who benefit from the covenant chose to take legal action against you. You may not be able to do that if you've already tipped off the beneficiaries though. Or appeal to the Lands Tribunal, but that can take a couple of years apparently.
http://www.harrison-drury.com/property-construction/conquering-restrictive-covenants/