Jump to content
House Price Crash Forum
paulkjones

Covenant - Private Dwelling Only

Recommended Posts

All - looking for some advice please

We accepted an offer on our property at the end of November

In January we located a house we would like to buy and had our offer accepted (house located on an estate/cul de sac with 7 other properties). Our buyer has so far remained very patient with us.

Mortgage agreed and solicitors now working on finalising the deals

However received a call from our solicitor advising there is an issue in that there is a covenant on the deeds of the house we would like to buy stating that the house is to be used for private dwelling only. Our intention was to run a child-minding business from the property. I expect the covenant at the time (30 years ago) was included to deter industry/larger businesses from the estate as opposed to the more popular recent trend of people who can and want to work from home.

Unfortunately there are no other available properties in the village suitable for our child-minding business needs

Solicitor is suggesting he approaches the holder of the covenant (the builder from 30 years ago) to see if they will remove the covenant from the transfer by way of a deed.

This service would be outside the remit of a standard conveyancing transaction as it would incur additional work on an hourly basis (£170 per hour plus vat)

I have asked the solicitor to advise the following

1/ likelihood from his Conveyancing experience the builder agreeing to remove/amend the deed

2/ an estimate of the number of additional hours involved

3/ would he be prepared to take the work forward on a fixed rate basis rather than an hourly basis, if so what his fixed rate would be

I need to consider also that the bank has partly lent money on the back of the profits from the child-minding business and I have given the bank our assurances that the business will continue to help pay back the mortgate

There is minimal information about the builder on the internet although they are still registered at Companies House (no website/email address etc)

I don’t know for sure but I believe they are no longer in operation – how may this affect the issue?

For information there is already another child-minder and an airport taxi company who live and work from the estate – not sure how they managed to get around the issue or whether they simply ignored it

Would welcome any ideas on how best to deal with the situation as we are very keen to still purchase the property but not break any rules

Thanks

Paul

Share this post


Link to post
Share on other sites

Hi

I think your approach to capping your fees for this matter is fine, but I think your solicitor is being a bit daft.

Although the covenant may be worded that way you must consider the actual risk of you being sued for breach. Firstly the builder would need to initiate proceedings against you but also successfully prove some sort of loss or problem.

Some years ago I sold a flat that contained a covenant that prevented unmarried mothers from living there! Our surveyor put the solicitors in their place when they agreed that it should be removed. He basically argued that a tribunal would agree that the clause was nonsense and therefore unenforceable.

Share this post


Link to post
Share on other sites

I appreciate your reply BlackSwan - thank you. My solicitor did give me an alternative as below FYI

"Alternatively, you can choose to simply ignore this covenant and proceed with your plans. I should advise though that to do this could leave you open to enforcement of the covenant at sometime in the future. It should be noted that there is a generally accepted rule arising out of case law where a breach of a covenant has been ongoing for 20 years or more it is deemed to be no longer enforceable. However, 20 years is a considerable length of time!"

I am starting to lean towards just going ahead and purchasing the property

If we have issues along the way we can either

1/ look to sell the property and move somewhere else

2/ try to negotiate with whoever we need to

3/ My wife looks for a different job if the covenant is enforced and she cannot continue with her business

Share this post


Link to post
Share on other sites

I am not surprised at that answer from your solicitor.

Up to to decide but solicitors always give safety first advice since it meets their insurance needs and generates fees.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   203 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.