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Covenant - private dwelling only

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  • Covenant - private dwelling only

    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
    Tags: None

  • #2
    Re: Covenant - private dwelling only

    Hi Paul

    The good news is that any covenant can be removed from a deed. Having a solicitor work on an amendment to that deed at an hourly rate of £170 + VAT, however, concerns me!

    I'm assuming that the property is freehold? Which document, specifically, is the restrictive covenant (to use as a private residence) written into?

    Dan

    Comment


    • #3
      Re: Covenant - private dwelling only

      Hi - yes it is a freehold property

      The restrictive covenant is written into the HM Land Registry title document and it says and I quote

      "Not to use or permit or suffer to be used the dwellinghouse erected on the property for any other purpose than as a private dwellinghouse"

      FYI we are considering taking out an insurance policy to cover us against any claims

      Thanks for your reply

      Comment


      • #4
        Re: Covenant - private dwelling only

        Hi Paul

        In that case, it may well be the best option to take out insurance rather than incur the costs of a lawyer drafting up a deed. Are you likely to need to develop the land or build on it at all? When taking out insurance, it is usually a pre-condition that no one has discussed the covenants with the parties who have the benefit of them.

        Given what you have said about the other properties undertaking similar activities to those which you have described, I would be minded to suggest the insurance route.

        Comment


        • #5
          Re: Covenant - private dwelling only

          Hi Welcome,
          If the builder or his successors are not in business it should be easier to get the covenant removed.

          You could try asking the Land registry if the covenant is registered and what steps to take if it is.

          nem

          Comment


          • #6
            Re: Covenant - private dwelling only

            No plans to develop the land other than erect a very small shed - we have not discussed the covenants with others on the close (although I was thinking about doing that at one point before we considered the insurance option.
            The insurance quote is £300 so I believe there is value in taking out this policy

            Comment


            • #7
              Re: Covenant - private dwelling only

              the builder seems to be still in business as he is still registered with companies house - although I believe he is as good as retired

              Comment


              • #8
                Re: Covenant - private dwelling only

                Originally posted by paulkjones View Post
                the builder seems to be still in business as he is still registered with companies house - although I believe he is as good as retired
                I think insurance then

                Comment

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