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debsirn

Multi-Let Ex-Council Property With Restriction Of Covenant

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Hello,

I am in a process of purchase an ex-council property with aim to rent it out as multilet. The vendor purchased this property from council about 14 years ago. The TP1 document receive from solicitor shows the following clause in the Third Schedule " Not carry out any trade business or profession in or upon the property or any part thereof but at all times to use the Property as a Private residence in single family occupation PROVIDED THAT this covenant shall not prohibit the use of the Property as the professional residence of a solicitor architect medical practitioner or dentist"

It also state that " The transferee to the intent that thus covenant may so far as possible bind all persons who are now or hereafter shall become entitled to any part of the property but not so as to bind the transferee or any such persons after he or they shall have parted with all estate and interest in the property hereby covenant with the transferor and its successor in title for the benefit and protection of the adjoining and neighboring land of the transferor that he the transferee and the person deriving title under him will henceforth duly perform and observe the covenant conditions and stipulations contained in the Third Schedule hereto"

The solicitor doesn't point out any issue but she probably is not aware that I plan to rent it out as multi-let. I will ask for her advice on Monday but would like to know general idea about this restriction and if there is any solution to remove this clause and at what cost? Any advice is very welcome.

Kr

Debsirn

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I think it was always the plan that council houses would end up in private LL hands and be rented out as multi occupancy dwellings. It's seems quite common so I'd be surprised if you couldn't work around any rules.

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Free legal advice is usually worth as much as you paid for it.

But it does say not carrying out any business and must be a single family private residence. Doesn't seem to leave a lot of wiggle room to me.

You seriously need to have a chat with your solicitor, take no advice from anyone else. He/she carries indemnity insurance in case advice is wrong.

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Renting out as a multilet is probably not a breach of the requirement to carry out business in the property, but there is no doubt that it is a breach of the requirement to use the property as a private residence in single family occupation.

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I am in a process of purchase an ex-council property with aim to rent it out as multilet.

Sadly this is all too common, a symptom of what is so wrong with our housing market. I've lived in HMOs like this, where rooms are rented out for almost £400/month, the living room converted into a bedroom, basically a case of cram them in for maximum profit.

Meanwhile the old lady next door lives in an almost identical house and pays about £320/month to rent the whole property from the council every month.

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Bad enough that council houses were sold to anybody let alone to a BTL multi let rentier. Have you exchanged yet? If not dont do it until you have told your solicitor your plans for the property. Solicitors should go through all restrictions, covents, etc with you before exchange so you know where you stand. If you have exchanged, your plans may be turn out to be a dead duck.

Sadly this is all too common, a symptom of what is so wrong with our housing market. I've lived in HMOs like this, where rooms are rented out for almost £400/month, the living room converted into a bedroom, basically a case of cram them in for maximum profit.

Meanwhile the old lady next door lives in an almost identical house and pays about £320/month to rent the whole property from the council every month.

Agreed.

As you asked...

FOAD

What does that mean?

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FOAD - F*** off and die - I believe.

I'm afraid this forum is unlikely to provide much of a sympathetic ear to the would-be HMO landlord. To the OP, the best advice is to chat to your solicitor. Personally, even as someone wanting to buy a house to live in I'd stay well clear of restrictive covenants like that.

Edited by StainlessSteelCat

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FOAD - F*** off and die - I believe.

I'm afraid this forum is unlikely to provide much of a sympathetic ear to the would-be HMO landlord. To the OP, the best advice is to chat to your solicitor. Personally, even as someone wanting to buy a house to live in I'd stay well clear of restrictive covenants like that.

I was going to ignore it but it did say "any advice".

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The wording is pretty clear - single family occupation.

What do you mean by 'multilet' anyway? There is IMO a significant difference between renting a 2 bed property to 2 sharers, or a 3 bed to 3, and turning the 2 bed into a 3 by ditching the living room, or a 3 to a 4 by ditto. Councils might overlook the first, but they might well take a very dim view of the second, and with extra people/comings and goings and noise, you might well have neighbours making complaints.

Personally I would think that if you sought to overturn the covenant by legal process you would be on an expensive hiding to nothing. Your solicitor would enjoy sending in his bill, though.

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This means you cant run a business from the property, so if you are a BTL landlord, you could not use this property as your business office.

If the property is occupied as a Private residence in single family occupation (whether renting owning outright or with a mortgage) then I don't see a problem.

The Multi-Let thing may be problematic, I assume you mean by this splitting it up into rented rooms. for this you need to talk to a lawyer and not listen to random advice on the internet. Apart from the covenant there are Fire regulations to consider.

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