Restrictive covenant

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  • Telometer
    started a topic Restrictive covenant

    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

  • Telometer
    replied
    Lawcruncher, thank you for your thoughts.

    Please would you say what you mean by becoming absolute?

    I spoke to another lawyer on this (ask two advisers, get three answers...) who said that in his view it was not a personal covenant, but that it clearly related to the remaining land of the development, as owned by Mr Cooper at the time of sale of this plot. To this extent, this plot benefits from the restrictive covenants applying to the plots sold prior to it, but the plots sold subsequently benefit from the restrictive covenants applied to this plot. What do you think?

    I therefore joyfully expressed my happiness that I would be able to make a claim against building works undertaken on the plots sold prior, and was told "dream on... but you should still get yourself an indemnity policy". The whole thing is an absolute racket - but a lot cheaper than a visit to Counsel.

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  • Lawcruncher
    replied
    The terms of the transfer clearly indicate that the land was registered when the covenants were imposed. There is therefore no possiblity of the covenants being unenforceable on a technicality.

    In this case the persons with whom the covenants are made are not the same as the person who gives consent. Unless he is in the Guiness Book of Records, George Edward Cooper will not be around to give consent. No one else can give consent. Depending on how the court construes the covenant they will either decide that the covenant becomes absolute or that it is discharged. See this article:https://parissmith.co.uk/blog/restri...ent-is-needed/ Loks like a case for counsel.

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  • Telometer
    replied
    Pilman, thanks for your thoughts. It also comes with the garage and garden of the adjacent property. Planning already exists for a large extension to the side of the house (about 50% of a new house). Local planning consultants thought there was no reason why planning would not be granted. Perhaps you would say a little more?

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  • pilman
    replied
    I have just seen the original deed from 1928 and then I realised what the very first posting on this thread was about.
    I am looking at a freehold property with a large garden that would very much suit an extra house being built in the garden.
    Having looked at plot 191 using Google Street view I have to say that as a retired director of a planning consultancy company, for someone hoping to obtain planning permission for such a development is just wishful thinking, even if the restrictive covenant was unenforceable.

    The phrases "No chance" and "Dream on" did come to mind though.

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  • Telometer
    replied
    Well, two weeks later I now have the 1928 transfer, which may be found at this link: https://tinyurl.com/y4kfu2hp

    So does it make sense that the Vendor his heirs and assigns (subject to the stipulations provisions and conditions set out in the Schedule [of Restrictive Covenants] hereto) continue to have the rights under the covenants. And these will therefore be the owners of the land that the vendor retained as at the time he sold the house I am buying, i.e. (today) the owners of the houses that were sold by the Vendor after mine. And this despite the fact that the covenant is drafted generally as a personal covenant rather than with regard to any particular land.

    The corollary is that I acquire the benefit of these covenants over the houses that had been sold by the Vendor before mine. The reality is I would have no hope of enforcing these covenants on any of the other 500 houses around.

    The references to noting on the Register - at the top of page 2 - suggests to me that the land was registered in 1928 though the Land Registry has been unable to provide any indication as to this. What do you think?

    Very grateful for all thoughts!

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  • Lawcruncher
    replied
    All references below to covenants are to restrictive covenants.

    The Upper Tribunal has the power to modify or discharge a covenant affecting freehold land.

    The court has power to decide if a covenant affects freehold land and to interpret its meaning and who (if anyone) can enforce it.

    If the Land Registry has any of the above powers I missed the announcement.

    There is though one thing the Registry can do and that is it can, if certain conditions are fulfilled, remove notice of covenants on the register if they were imposed before first registration and not registered as a land charge at the Land Charges Registry. If covenants are not noted on the register they are not enforceable in equity.

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  • Telometer
    replied
    I think the corollary of the number of claims being very low is that the risk is de minimis! Based on the insurance quoted they cannot expect a claim more than once every several thousand cases at least.

    I have pretty much come round to your way of thinking that the best solution will be to pay the insurance.

    It has been suggested to me, by the way, that lifting the charges may be done by application to the Land Registry directly - rather than the tribunal process, which the Registry charges the thick end of £1500 for. Is this person barking up the wrong tree, do you think?

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  • Lawcruncher
    replied
    Applying to the tribunal to get the covenant removed (which is not guaranteed to succeed) is far more expensive than an indemnity policy. Some 20 odd years a colleague quoted 14,000 pounds.

    I am no actuary, but I think the point is not so much that the risk in any particular case is de minimis, but that the number of claims overall is very low. I imagine a big chunk of what you pay is administration.

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  • Telometer
    replied
    Thank you both.

    An indemnity policy is therefore likely to be the best approach. I really resent paying for them as they are a complete scam when the risk is so patently de minimis - it must be, otherwise the cost would be rather more than 0.1% of the sum indemnified. I'd far rather apply to the Land Registry to have the covenant removed, but I guess that I won't be allowed to once I have purchased insurance?

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  • pilman
    replied
    The various legal authorities regarding whether only an original Vendor could have given consent. or whether the consent has to be granted by a successor in title when the benefitted property is accurately identified was discussed on the web-site below.

    http://www.propertylawuk.net/restric...tsconsent.html

    Leave a comment:


  • Lawcruncher
    replied
    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.

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  • Telometer
    replied
    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?

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  • Lawcruncher
    replied
    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.

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  • pilman
    replied
    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.

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