Restrictive covenant

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    Restrictive covenant

    I am looking at a freehold property with a large garden that would very much suit an extra house being built in the garden. However, there is a restrictive covenant preventing this, without permission.

    Am I right in assuming that there is a fair chance that the restrictive covenant may be owned by one of the freehold shark companies that will want a huge payment for the privilege of granting this permission?

    In the event the covenant holder cannot be traced, what are the odds at the Upper Tribunal of being granted permission?

    Thanks

    #2
    Lots of variables here. First questions: When was the covenant imposed? Was it imposed before the date of first registration?

    Comment


      #3
      Hello and thank you for your response. I have been digging. The covenant was imposed in 1927, by the original builder. The builder built an estate of 400 houses in or around that year and sold the freeholds to private individuals. All the houses have the same restrictive covenant. It prohibits any further erection on the site, including building extensions as well as new builds, or splitting into flats without the consent of the covenant holder.

      If I had to guess, half the houses have had some such work in the intervening period. These days it is a conservation zone, so the council manages the aesthetic aspects. Loft conversions have gone up left, right and centre over the last decade or so.

      I have knocked on the doors of some of the residents who have had recent extensions and they all looked at me blankly (I do hope I haven't given any of them sleepless nights). However the covenant seems to be pretty dead. One of the people seemed to think that it had been acquired by the council (on the back of an article on the internet regarding the estate).

      But, I imagine that if a new house is built on the site to be sold, no mortgage lender will touch it for 12 months after construction, that being the point at which (the internet tells me) it would be possible to insure against the covenant holder's suddenly appearing.

      Comment


        #4
        Asking the neighbours was not a good idea. Whether or not the covenant was correctly worded to achieve this, they were, I assume, the intended beneficiaries of the covenant.

        Comment


          #5
          You have answered: "When was the covenant imposed?" but not: "Was it imposed before the date of first registration?" Is the property registered? If it is, the date of first registration is the date given in brackets at the start of entry number 1 in the Property Register of the title.

          Comment


            #6
            Apologies. Yes, the property is registered. It was registered in 2007.

            Comment


              #7
              The covenant was imposed in 1927, by the original builder. The builder built an estate of 400 houses in or around that year and sold the freeholds to private individuals. All the houses have the same restrictive covenant. It prohibits any further erection on the site, including building extensions as well as new builds, or splitting into flats without the consent of the covenant holder.
              When that covenant was inserted into the conveyance there had to be a clearly identified parcel of land that was to have the benefit of the covenant.
              That is not the person or company that sold the property, it is an identified parcel of land that had the benefit in 1927.
              The wording used in the 1927 conveyance will need to be studied in order to identify which land was to have the benefit and also who is now the owner of that land whose property will be damaged if a breach of covenant occurs.

              After 1925 all restrictive covenants placed over unregistered land had to be registered as a Class D(ii) Land Charge..

              It is probable that Lawcruncher will be able to explain that in a way that can be understood by someone unfamiliar with property law, now that you have answered the question he posed earlier.

              He is a retired legal professional who knows the law, whereas I am a retired planning consultant and property developer who looks differently on many of these older restrictive covenants because I have often tending to disregard them because I doubt whether anyone would be capable of starting a suit for breach of covenant when a new house is built on land that was part of a plot covered by a restrictive covenant such as the one being referred to in this posting.

              i do agree with one comment you made earlier, it will be the solicitor tasked with the conveyancing once a new house has been built who will be the one person who will advise a prospective buyer not to proceed. with the purchase, even if there is less than a .01% chance of such a claim ever being made. It's a cover your back situation that all solicitors will abide by.

              Comment


                #8
                Thank you Pilman. With address details redacted here is the full detail of the charges:

                (It is in fact the 1928 transfer, not 1927, apologies for the above typo.)

                Extract from A: Property Register
                1 The Freehold land shown edged with red on the plan of the above Title
                filed at the Registry and being [Address, redacted]).
                2 The Conveyance dated 14 October 1925 referred to in the Charges
                Register contains the following provision:-
                "That nothing in these presents contained shall by implication of law
                operate to confer on the Purchaser his executors administrators and
                assigns any right of light or air or any other rights or easements
                whatsoever which would or could in any way restrict or interfere with
                the free use and enjoyment of any other part of the [redacted] Estate
                for building or other purposes."
                3 The Conveyance dated DD March 1927 referred to in the Charges Register
                contains a provision in identical terms than that contained in the
                Conveyance dated DD October 1925 referred to above.
                4 The land has the benefit of the rights granted by but is subject to the
                rights reserved by the Transfer dated DD January 1928 referred to in
                the Charges Register.

                C. Charges Register:
                Two Conveyances together comprising the land in this title and other
                land one dated DD October 1925 and the other dated DD March 1927 and
                both made between (1) [redacted] (Vendor) and (2) [redacted] (Purchaser) contains in identical terms except
                that the First Schedule to the Conveyance dated DD March 1927 only
                contains the paragraphs numbered 1, 2, 3 and 10 below:-
                "THE Purchaser doth hereby for himself and his assigns and to the
                intent and so as to bind all future owners and tenants of the lands and
                premises hereby assured or any part thereof and to bind such lands and
                premises into whosesoever hands the same lands and premises may come
                (but not so as to render the Purchaser or any such future owner or
                owners as aforesaid personally liable in damages for any breach thereof
                after he or they shall have parted with all interest in the premises in
                respect of which a breach of covenant shall occur) COVENANTS with the
                Vendor his heirs and assigns the owner or owners for the time being of
                the remaining unsold portions of the [redacted] Estate that the
                Purchaser his heirs and assigns will at all times hereafter observe and
                perform the covenants and restrictions in relation to the said lands
                and premises hereby assured which are contained in the First Schedule
                hereto.
                THE FIRST SCHEDULE above referred to
                1. NO spirituous or fermented liquors shall be sold upon any part of
                the land hereby conveyed or in any building which may be erected
                thereon.
                2. NO factory or other works gasometer theatre cinema place of public
                entertainment hospital or lunatic asylym shall be erected carried on or
                opened upon any part of the said land hereby conveyed or any building
                which may be erected thereon.
                3. NO part of the said land hereby conveyed or any building which may
                be erected thereon shall be used for any noisy or dangerous trade
                business pursuit or occupation or for any purpose which shall or may be
                or grow to be in any way a nuisance damage or annoyance to the Vendor
                or his successors in title or the owner or owners for the time being of
                any other part of the [redacted] Estate or his or their tenants or to
                the owners or tenants of the neighbouring property or the
                neighbourhood.
                4. NO building on any part of the said land which may be erected
                fronting on the road shown on the said plan leading from the junction
                with [redacted] Street and the [redacted] Street to [redacted] Street
                shall be used for any purpose other than a private residence or a shop
                or outbuilding in connection therewith.
                5. NO shop or private dwellinghouse shall be erected fronting the
                aforesaid section of roadway unless the selling value thereof at the
                date of the completion thereof is in the case of a shop at least £1,500
                and in the case of a private dwellinghouse (whether detached or semidetached)
                at least £1,050 and no such private house the selling value
                of which at the date of the completion thereof is less than £1,500
                shall at any time thereafter be converted into or used wholly or in
                part as a shop. If any question shall arise as to the selling value of
                any shop or private dwellinghouse the same question shall be settled by
                the Surveyor for the time being of the Vendor or other the personal
                representative or representatives for the time being of the Testator.
                6. EACH of the houses referred to in the last preceding clause shall
                be either detached or semi-detached.
                7. THE Purchaser shall submit a plan to the Vendor showing the
                proposed lay out of the pieces of land between the Points A and B on
                the plan as a building site including the roads and the plots into
                which the land is to be divided and not commence any building
                operations until the Vendor has in writing approved such plan.
                8. THE Purchaser shall not build on the said land or develop the same
                as a building estate except in accordance with such plan as aforesaid
                or with such modifications as the Vendor may in writing approve.
                9. THE said shops or dwellinghouses shall be generally in accordance
                with the plans and elevations to be approved by the Vendor his Surveyor
                or Agents. The Purchaser shall pay all fees and expenses of such Agent
                or Agents in connection with the approval of such plans.
                10. IN these stipulations the expression "the Vendor" shall where the
                context so permits include the owners or owner for the time being of
                the [redacted] Estate their heirs and assigns.
                NOTE 1: The testator in paragraph 5 was [the Vendor in the 1925 and 1927 transfers]
                NOTE 2: There are no points A and B referred to in Clause 7 on the plan
                on the said Deed.
                2 A Transfer of the land in this title and other land dated DD August
                1927 made between (1) [Vendor] and
                (2) [Purchaser] contains the following covenants by the Vendor:-
                "The Transferors for themselves their heirs and assigns hereby covenant
                with the Transferee his executors administrators and assigns that they
                the Transferors will not permit any other shop erected on the
                [redacted] Estate to be used for the business of a
                tobacconist stationer newsagent or any kindred trade so long as such
                trades are carried on by the Transferee upon the property hereby
                transferred."
                3 A Transfer of the land in this title dated DD October 1927 made between
                (1) Vendor and (2) Purchaser
                contains the following covenants by the Vendor:-
                "THE Transferors hereby covenant with the Transferee that so long as
                the land hereby transferred is used for carrying on the trades or
                businesses of Fruiterer Fishmonger Game Dealer or Poulterer they will
                not permit any other land comprised in Titles Number XXX, XXX, XXX to be used for similar trades."
                NOTE: These titles comprise the unsold portions of the Transferor
                [redacted] Estate.
                4 A Transfer dated DD January 1928 made between (1) Vendors
                and (2) Purchaser contains restrictive covenants.
                ¬NOTE: Original filed under title no XXXX.
                Covenants originally filed under title no XXXX:
                The following are details of the stipulations contained in the Transfer
                dated DD January 1928 referred to in the Charges Register:-
                "1. THE Premises shall be used as a private dwellinghouse only and no
                building erected or to be erected upon the land shall be converted into
                or used as flats maisonettes or separate tenements or as a general
                apartment or boarding house.
                2. THE front garden of the premises shall at all times be kept in neat
                and proper order and condition.
                3. NO tree or trees in front of or otherwise adjacent to the premises
                shall be at any time cut down lopped grubbed or otherwise dealt with in
                many manner whatsoever.
                4. NO aerial posts or wires erected upon or over the premises shall be
                of an unsightly appearance or be otherwise calculated to cause any
                annoyance or damage to the owners or occupiers of any adjoining
                property or to the Estate.
                5. NO additional building or erection whatsoever shall be built or
                erected upon the land without the consent in writing of the Vendors
                first hand and obtained."

                Comment


                  #9
                  Originally posted by leaseholder64 View Post
                  Asking the neighbours was not a good idea. Whether or not the covenant was correctly worded to achieve this, they were, I assume, the intended beneficiaries of the covenant.
                  Don't worry, they were 100 houses away...

                  However, what an interesting suggestion. I wonder if what you say is correct - that the person with the rights under the covenant is in fact the next door neighbour whose property would be impacted in terms of light, etc. If so then the good news is that said next door neighbour has a recent loft extension which, if what you say is correct, is presumably in breach of his own reciprocal rights under a similar covenant. On that basis presumably we could undertake a reciprocal waiver of covenants? Would that be enough to satisfy a subsequent buyer's solicitor?

                  Comment


                    #10
                    COVENANTS with the Vendor his heirs and assigns the owner or owners for the time being of the remaining unsold portions of the [redacted] Estate.
                    Titles Number XXX, XXX, XXX
                    The unsold parts of the original estate was the land that was to have the benefit of the restrictions imposed, so will any of those titles be affected by a new house if planning was granted by the local planning authority.

                    NO additional building or erection whatsoever shall be built or erected upon the land without the consent in writing of the Vendors first hand and obtained."
                    This refers to the named vendor in 1928, but that was the person selling the property at that time.It now needs to be established if that same person retained other property that would have the benefit of a restrictive covenant, because a person cannot have the benefit if he just sold off the only property he owned at that time.

                    It is also probable that the vendor no longer exists unless it was limited company that has continued in business since 1928.

                    If no one can give permission then the covenant is no longer valid.

                    Comment


                      #11
                      Thank you.

                      The only references to 'unsold' are in the covenants arising from the 1927 transfers. These covenants only refer to selling alcohol, and the trades that may be undertaken, they do not restrict the rights to build upon the land - very sensibly as the houses had not been built at that stage.

                      It is the 1928 transfer that has the relevant covenant restricting building rights. The vendor in the 1928 transfer was the builder, which was two individuals, not a limited company. So far as anybody can possibly be aware they sold all the houses on the estate in 1928.

                      Presumably the restriction was included to prevent buyers from destroying the overall look of the builder's beautiful new estate before he had sold all the properties? And that once he had sold all the properties he was no longer going to worry about it, and at that point the covenant would fall away anyway as he had no longer any interest in the land. BUT the covenant remains on the title to haunt all future purchasers' solicitors.

                      So when it comes to taking a commercial view, anybody claiming to be a covenant-holder would have to enforce this through the court. They would have to prove that they still owned land in respect of which this was a relevant point. I presume that I cannot have a piece of land in Manchester that is stated as having the benefit of a restrictive covenant in respect of a piece of land in Birmingham? Therefore for there to be any loss that would have to be compensated at this stage in proceedings the covenant-holder would pretty much have to own the house next door.

                      Best of all, the house next door used to belong to the same person as the house I am buying, which I believe will have caused any restrictive covenant to be extinguished. (Re Tiltwood, Sussex (1978) Ch 269). My proposed works are between the target house and the house next door.

                      "If no one can give permission then the covenant is no longer valid." Yes, but you cannot ever prove that nobody has this right...

                      Comment


                        #12
                        Now that you know that the "Vendor" named in the 1928 deed is dead then it is impossible for the "Vendor" to grant permission for anything.
                        That is why the covenant is not enforceable, because I seem to remember that there was case law to support that contention.

                        The 1928 covenant makes no mention of land that was to have the benefit.
                        It merely stated that the vendor was taking the benefit of a covenant that said he (or they) had to grant permission.

                        That a dead person cannot grant permission is what is now the fact, so the covenant has to be worthless.

                        Comment


                          #13
                          What we are looking at is covenant 5 in entry 4 in the charges register. The first observation is that the instrument referred to is a transfer, That suggests to the point of near certainty that the property was registered in 1928. That means that the technicality I was hoping might be available is ruled out. Please confirm the date at the beginning of entry 1 in the property register.

                          The wording of the covenant requires the consent of "the Vendors". What we need to know is if the transfer contains a clause similar to clause 10 in entry 1 in the charges register. A note says that the original is filed under another title. You need to obtain a copy of the transfer and see if "the Vendors" is defined or declared to include successors in title.

                          EDIT: The above posted before seeing post 12. Pilman has overlooked the possibility that "the Vendors" may include successors in title or may be a company.

                          Comment


                            #14
                            Thank you. Following a long call with the Land Registry they do not know when it was first registered. I am writing to find out. The good news is that they do have a copy of the 1928 transfer on file electronically so it should be with us within a week.

                            "the Vendors" are natural persons, not corporate, by the way - this point was lost somewhere upthread in the reams of documentation.

                            Am I barking up the wrong tree with my enthusiasm for the fact that there is no piece of *land* named as having the benefit?

                            Comment


                              #15
                              Originally posted by Telometer View Post
                              TAm I barking up the wrong tree with my enthusiasm for the fact that there is no piece of *land* named as having the benefit?
                              When you have the full copy of the transfer it may prove that that is not the case. Anyway, to answer your question, I fear so. Nothing in the law of restrictive covenants is straightforward. If the deed imposing the covenant is not clear or is silent, evidence from other sources may be brought in.

                              Comment

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