"Private dwelling house" restrictive covenant and HMO use

[JamesHopeful]

I am seriously considering buying a house which has the following restrictive covenant from a 1937 conveyance (which would be around the time that the house was built):

"That no building of any kind other than a private dwellinghouse with appropriate outoffices and outbuildings to be appurtenant thereto and occupied therewith shall be erected or used upon the property hereby sold."

Would this restrictive covenant stop me from letting the house as an HMO on a bedroom-by-bedroom basis? And even the covenant it were never enforced, would a lender refuse to lend on the property as an HMO due to this covenant?

I am aware that the judgement in Roberts v Howlett [2002] 1 P&CR 19 stated that the term "single private dwellinghouse" included an HMO let to a pre-formed group of friends, but implies that an HMO let bedroom-by-bedroom basis would not necessarily be included. However, the covenant I am looking at omits the word "single" which could potentially allow its definition to be drawn slightly more widely. Is there any case law on this point?

I have no idea who the current beneficiary of the restrictive covenant is (if any). I know that buyers would often obtain an indemnity policy in this situation to be on the safe side, but I don't think this is possible until the covenant has been in breach for at least a year (which isn't the case here).

Any ideas? Should this be a deal-breaker?

[Lawcruncher]

The law of restrictive covenants is quite involved and a considered opinion cannot be given without investigation. There is though one thing which can be done which may knock the problem on the head. If the covenant was imposed when the land was unregistered, the register will show the date and parties of the conveyance. Your solicitor should do a land charges search against the buyer. If the covenant was not registered against the buyer it is unenforceable and when registering you as proprietor your solicitor can apply for the note of the covenant to be removed from the register.

If the covenant was registered you need to "take a view" after discussing the question with your solicitor. What you do not want is an argument with someone who objects. A distinct possibility is that an occupant cause problems and that a neighbour goes and looks at his title to see if there is anything he can do. The counsel of perfection has to be to look for another property.

[JamesHopeful]

Lawcruncher,

Thank you very much for your thoughts. On this one point:

There is though one thing which can be done which may knock the problem on the head. If the covenant was imposed when the land was unregistered, the register will show the date and parties of the conveyance. Your solicitor should do a land charges search against the buyer. If the covenant was not registered against the buyer it is unenforceable and when registering you as proprietor your solicitor can apply for the note of the covenant to be removed from the register.

The Title Register does show the date and parties of the conveyance so I assume that it was imposed when the land was unregistered (land in this area would have been very unlikely to be registered as early as 1937 anyway).

In terms of exactly what search I or my solicitor needs to request, is this just the standard LLC1 search against the property's address which, I think, will show up in any Local Search? Or is it a specific search with the Land Registry where we'd have to provide the name of the limited company which was the buyer back in 1937? (I've seen form K15 for searches against unregistered land but I am not sure that that's the one).

[Lawcruncher]

Nothing to do with local searches. What is needed is an application for an official search in Form K15 - see here: https://www.gov.uk/government/public...pplication-k15. The period to search is 1937 to the date of first registration which will be shown on the register.

[pilman]

The Title Register does show the date and parties of the conveyance so I assume that it was imposed when the land was unregistered (land in this area would have been very unlikely to be registered as early as 1937 anyway).

It can be verified using the Land Registry web-site shown below when compulsory registration was imposed on an area in England and Wales, although parts of London were liable to be registered after 1899.

https://www.gov.uk/government/public...-registrations

[JamesHopeful]

Thank you very much for your assistance, Lawcruncher.

[JamesHopeful]

Nothing to do with local searches. What is needed is an application for an official search in Form K15 - see here: https://www.gov.uk/government/public...pplication-k15. The period to search is 1937 to the date of first registration which will be shown on the register.

Lawcruncher

I have good news (I think).

I did a K15 search against the purchaser company (which I assume was builder/developer), and there are lots of D2 (i.e. restrictive covenant) land charges registered against it for neighbouring properties at various dates in 1937 and 1938, but none which mention the property in question.

There is a D2 charge which just gives the name of about half a dozen local streets (including the street in question) without identifying specific houses, but it is dated a couple of months prior to the relevant conveyance so I assume it must relate to something else.

As such, it seems this issue has gone away and the restrictive covenant shouldn't have been registered at all.