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Aug, 2014

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  1. #1

    Default Restrictive Covenant Question

    I have a 2 bed EOT ex council house (1978) that has the benefit of planning permission for a 3 bed EOT next to it.

    The first house becomes mid terrace.

    In 1993 the council sold their estate to a Housing Association. They expressly assigned the benefits and all other matters of all their to RCs to the HA.

    The house has a RC that states "The Transferee shall not erect on the property or any part thereof any shed outhouse or any other structure os any kind whether permanent or temporary without the prior written consent of the Council given under the hand of its Secretary for the time being and in the event of such consent being obtained to comply with all conditions imposed in such consent and to carry out all work to the satisfaction of the Council's Surveyor for the time being".

    The HA have just refused, which is frustrating. Is there anything that I can do?

    Thanks for any help you can give me.

    D

  2. #2
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    I don't think so. Presumably this was pointed out to you when you bought, so can you really complain?

    There may be a good reason for this. Some ex-council house neighbours of mine filled their entire garden with some sort of weird canvas topped structure. They used it for their car breaking business. What a nightmare.

  3. #3
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    I think you have to look closely at the definitions in the transfer under the Right to Buy scheme as to whether references to the Council could include its successors in title. It might be that you can argue that it is not for the HA to give the consent but the Council. Certainly that is what happens in my area where a similar thing has happened. Consent is sought from the Council in such cases where they originally sold the houses (and they charge £10-20K for it) even though the housing stock itself now belongs to a HA. However in your case if you tried that I suspect that the HA would put the Council up to refusing so it might not take you any further.
    RICHARD WEBSTER

    As a conveyancing solicitor I believe the information given in the post to be useful (provided it relates to property in England & Wales) but I accept no liability except to fee-paying clients.

  4. #4
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    Whether, and if so by whom, restrictive covenants may be enforced is not easily answered as the law is quite involved.

    Among the questions that need to be answered are:

    1. Has some registration formality been overlooked?

    2. Has the instrument imposing them been drawn up so that it can be determined what land is to benefit from the covenants and who can enforce them?

    3. Does the person purporting to have the right to enforce the covenant own land capable of benefiting from them?

    4. Have circumstances changed since the covenants were imposed so that enforcement would be unreasonable?

  5. #5
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    To comment on Lawcruncher's points I would say it is one thing to conclude that someone seeking to enforce a covenant would have an uphill struggle. You might do this and decide to take the risk yourself and live in the new house.

    When you come to sell it may be quite another thing to persuade a buyer of the non-enforceability of the covenants and therein lies the practical difficulty.

    Of course if you sit there in the new house for 20 years it becomes immune under Hepworth v Pickles.
    RICHARD WEBSTER

    As a conveyancing solicitor I believe the information given in the post to be useful (provided it relates to property in England & Wales) but I accept no liability except to fee-paying clients.

  6. #6

    Default

    Thanks you for your help.

    RW.It could be argued that it is the council who should give consent, but, as you point out it does not really get me anywhere; it is a council fairly local to you. I'm not sure if it comes under right to buy as was purchased from council in 1978 by previous owners.

    LC
    1 It was registered in 1978, this was first registration. This transfer refers to a 1931 conveyance, this does not seem to be registered.
    2 The covenant is with the council for the benefit of all and every part of the land that was transferred in a previous conveyance (1931)- so far despite searches in deeds and LR this document is elusive
    3 They own houses across the road, but I do not think that these are included in the 1931 conveyance. I think that they own the footpath outside the property and a couple of houses say 50 yards away in the 1931 conveyance.
    4 Housing association have built on the land that they purchased from council!!

  7. #7
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    1 It was registered in 1978, this was first registration. This transfer refers to a 1931 conveyance, this does not seem to be registered.

    If on the sale the land was subject to compulsory registration then the necessary registration requirements will have been complied with.

    2 The covenant is with the council for the benefit of all and every part of the land that was transferred in a previous conveyance (1931)- so far despite searches in deeds and LR this document is elusive

    I see that the council assigned the benefit of the covenants so we do not need to to know whether the "the council" includes its successors in title. However, the question arises when consent is required as to who is to give the consent. Sometimes the wording is such that consent can only be given by the original covenantee.

    Anyone hoping to enforce the covenants is clearly going to need to show the land intended to benefit. They may have a problem if it is defined by reference to a deed that cannot be found.

    3 They own houses across the road, but I do not think that these are included in the 1931 conveyance. I think that they own the footpath outside the property and a couple of houses say 50 yards away in the 1931 conveyance.

    The sole question is whether they own land intended to be benefited and whether that land can actually benefit.

    4 Housing association have built on the land that they purchased from council!!

    Probably not relevant. What may be relevant is whether adjoining properties have carried out works of the type you propose so that enforcing the restriction against you would be unreasonable.

    *

    Having regard to 3, why not write to the HA and ask them to prove the land they own is land intended to benefit from the covenants.

  8. #8

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    Thanks for all your help.

  9. #9
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    In 2007 I helped my daughter do exactly what is being proposed in this posting.

    The house was an ex-council house with a side garden on which planning permission was gained for a new attached house.

    A Housing Association had been formed in 2000 to take over all the stock of Council houses in the district. There was a Large Scale Voluntary Transfer (LSVT) when all the houses were valued at an average cost of £7,800 each.

    This was in a District where my daughter had just paid £190K for her ex-council house.

    The HA was asked to grant permission to allow the new house to be built and demanded a large sum of money to allow that to happen.

    I negotiated with the HA by telling them that any decrease in value of the neighbouring houses they owned, if they were compelled to dispose of any one of them because the tenants retained a right to buy, would be negligible because of the artificial price they had bought the houses for.

    A tenant could receive a discount capped at 38K on a house valued at £150K - 180K based on current market value, as evidenced by the house price my daughter paid for an identical three bedroom house of a common design to others on the estate.

    I had also two years previously had the same situation with another property previously owned by a council and then had made an application to the Lands Tribunal to have the restrictive covenant removed because it was no longer relevant.
    Doing the application on my own behalf had cost me £3.5K, so what I did was offer the HA a sum of £5k and agreed to pay their legal fees in return for them agreeing to modify the restrictive covenant and let the new house be built.

    Knowing the price paid by the HA for each house was a solid negotiating point, as there was no way they would lose money by allowing the house to be built.

    That is the whole point of a restrictive covenant. It is intended to protect the land that had the benefit of the covenant.

    If there is no reduction in value of that retained land, then there is no financial damage caused, which is the remedy if anyone is sued for breach of contract.

    You should consider negotiating a sum of money to release the covenant, or consider making an application to have the covenant removed through the newly named Lands Tribunal, as it can be shown to be unnecessay if the HA in your area have developed new housing alongside the existing housing stock they acquired in a LSVT.

    One more new house cannot possibly be responsible for reducing the value of the houses they acquired, but confirm what those costs were before starting to negotiate.

  10. #10
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    You need to be very careful when it comes to the release of restrictive covenants to make sure the release is executed by all those entitled. If the covenant is with the council for the benefit of a particular estate then it is not just the HA that takes over from the council that can enforce the covenants, but also the other owners of property on the estate capable of benefiting from the covenants. (The foregoing does not apply if the document provides to the contrary.)

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