Purchasing a freehold with restrictive covenant against letting part of the property

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Purchasing a freehold with restrictive covenant against letting part of the property

    Hello all

    I am a first-time buyer about to purchase a freehold house in London. I am otherwise very happy with the house but have some reservations regarding a couple of the restrictive covenants:

    12.4.1.1 - "The Transferee shall not part with or share possession or occupation of the whole or any part or parts of the Property except by way of a letting of the whole of the Property or a transfer of the whole of the Property in accordance with 12.4.1.2 and 12.4.1.3 and there shall be no transfer, underletting of any part of the Property (as distinct from the whole)"

    12.4.1.6 - "not to use the building on the Property for any use other than for private residential purposes and so that it shall be occupied by one household only"


    This house was built just under a decade ago as part of a new development including other houses as well as leasehold flats. I've been informed by my conveyancers that restrictive covenants are generally pretty common with these kinds of properties, however in my research I've not been able to find anything similar to the specific clauses above.

    I understand from my conveyancers that the above would restrict me from taking on a lodger in a spare room. Whilst I currently have no intention of taking on any lodgers, I did expect to at least have this as an option given I am purchasing the freehold. Especially with the current uncertainty in the economic outlook, I would certainly like to have the option to rent out a spare room (e.g. under the government's Rent A Room Scheme) if money ever became tight.

    I guess I'd be interested in hearing from more experienced members on this forum how concerned they would be about this in my situation:
    - Is such a covenant likely to affect the future marketability or resale value of this property?
    - Is it likely that this covenant would actually be enforced in practice? My understanding (correct me if I'm wrong) is that the original developers are the beneficiaries of the covenant in this instance. These developers have long since sold off all their properties and no longer seem directly involved in the development, so why would they even care about a lodger?
    - Would it be possible to get this covenant cancelled?

    I have already contacted the managing agent acting on behalf of the resident's management company to see if they can provide permission in principle for a lodger, however they have said they cannot do this.

    Thank you all in advance for your advice and input.

    #2
    Is it likely that this covenant would actually be enforced in practice?
    Expressing a purely personal opinion based on experience of dealing with restrictive covenants when buying land for development purposes, I would ignore the covenant.

    The only time there was ever a problem came when it was time to sell a property that was burdened by a restrictive covenant that had been ignored.
    It was always the solicitor acting for the purchaser who was the person who created a problem regarding the restrictive covenant, but the one you are referring to will not be applicable when you come to sell the property, as long as the "lodger" has been told to move out prior to the sale being completed, so that vacant possession is available to the new buyer on the completion day.

    Comment


      #3
      Thank you for your thoughts! It's reassuring to hear that restrictive covenants haven't caused many issues in your experience.

      Having done a bit more research, I'm now slightly confused as to the relevance of the management company at all with regard to this specific issue. The Land Registry TP1 form which sets out the covenants identifies the Transferor as the original developer and the Transferee as my seller. By my understanding this means it's only the original developers who are the beneficiaries of the covenants, and the management company wouldn't have any influence either way? My confusion stems from my conveyancers telling me, when I first asked them about the covenant, that I might be able to obtain permission from the management company.

      Comment


        #4
        "The Transferee shall not part with or share possession or occupation of the whole or any part or parts of the Property except by way of a letting of the whole of the Property or a transfer of the whole of the Property in accordance with 12.4.1.2 and 12.4.1.3 and there shall be no transfer, underletting of any part of the Property (as distinct from the whole)"

        The above looks void as an unlawful restraint on alienation. Unless there is a later statute which allows exceptions which has not come to my notice, the law is set out in the statute of 1290 known as Quia Emptores which provides that "it shall be lawful to every Freeman to sell at his own pleasure his Lands and Tenements, or part of them". In any event, taking in a lodger would not be against the covenant so long as he is not granted a tenancy.

        "not to use the building on the Property for any use other than for private residential purposes and so that it shall be occupied by one household only"

        There is no definition of "household" which applies to private documents. However, if we are talking about an average-sized house and a situation where all the inhabitants (whether related or not) share facilities such as bathroom, lounge and kitchen then you have a single household.

        Comment


          #5
          Sounds like a plan to stop someone creating an HMO.

          Comment

          Latest Activity

          Collapse

          • Change of property layout
            by Anna1985
            Hi, acquiring a freehold and would like to carry out bathroom alteration - replace current cabinet in the bathroom with the door opening into the hall as it was originally.
            it would involve a lease alteration and re-drawing the property plan.

            I take it it would be best to do it along...
            12-07-2020, 10:16 AM
          • Reply to Change of property layout
            by AndrewDod
            Is this a flat? What do you mean by "acquiring a freehold"?
            12-07-2020, 20:43 PM
          • Reply to Change of property layout
            by Anna1985
            A bit difficult to explain, basically next to the bathroom there was an airing cabinet, which was removed and the stud wall was put in the previous door opening. With the cabinet door made to open into the bathroom.

            I want to remove it and re create the original airing cabinet with the...
            12-07-2020, 17:15 PM
          • Reply to Change of property layout
            by pilman
            If you are contemplating an act which would require the door of the bathroom to be re-hung so that it opened outward rather than inwards, that does not seem to require any action at all as per the lease, or the freehold.

            Use of the word "cabinet " is confusing since most "bathroom...
            12-07-2020, 14:12 PM
          • Incorporating Adjacent Land into Curtilage
            by StuStew
            As discussed in a recent thread, I am looking at the possibility of purchasing a very small piece of land (approx. 0.02 acres) adjacent to our property.

            My intention is to incorporate this land into our curtilage. It 'fits naturally' into our existing boundary and is not agricultural land....
            08-07-2020, 20:00 PM
          • Reply to Incorporating Adjacent Land into Curtilage
            by StuStew
            The land is currently not being used at all. It was used by a local stonemason up until the 1970s or 1980s, and has what I would describe as a semi-derelict (walls OK, roof caved in) stonemason's workshop (about 15 m^2 in size) on it. The workshop is surrounded by grass and overgrown shrubs etc which...
            12-07-2020, 11:12 AM
          • Reply to Incorporating Adjacent Land into Curtilage
            by pilman
            Nothing to stop you, but the local planning authority could begin enforcement proceedings claiming that there had been a breach of planning control, which often happens if a neighbour contacts the LPA to complain about the way you have developed the land by changing its use.

            Using any land...
            12-07-2020, 00:05 AM
          • Reply to Incorporating Adjacent Land into Curtilage
            by StuStew
            Many thanks for your help Pilman.

            Out of interest, if permission for a change of use was refused, what is to stop me putting a fence/wall along the edge of the land and using it like a garden, at least in the context of making it look nice and planting flowers, etc? One side of the land...
            11-07-2020, 18:29 PM
          • Make alterations to property and/or Rent it before completion
            by bob369
            Is it possible to make minor alrterations to a property and/or rent it from a vendor, during the Conveyancing process ?

            I am looking to buy a C3 Semi and convert to C4 Small HMO, and secure the C4 PD, before an artkcle 4 is introduced - the date of which may occur towards the end of the...
            09-07-2020, 21:01 PM
          • Reply to Make alterations to property and/or Rent it before completion
            by royw
            It's a risk to both parties before exchange. You can spend money only to find the vendor pulls out.
            11-07-2020, 18:17 PM
          Working...
          X