Weird covenant - advice needed please

[Somerset12]

Hi
I am buying a property which has come up with an old covenant which is unusual. The property beside it had a bore hole and the original owner of the property (1940s) I am buying asked to connect to the supply of water which was agreed. They also then agreed to pay them for this supply of water - 5% of the property value every year! (don't know whether property refers to the water or the land and house?).

The bore hole is no longer used as both properties are connected and supplied with water from the mains water company. I am informed my property is not using any of the old drains.

Before I proceed any further can anyone tell me from a legal perspective if this positive covenant is still enforceable, particularly as we no longer have any water supplied? a 5% charge would be about £10,000 each year!

My solicitor has been very very unhelpful with this and has despite 4 emails, not answered this question but just tells me not to worry about it. This seems like a complex area of law though so am keen to get other opinions. Many thanks for your help.

[R0b]

Re: Weird covenant - advice needed please

Hello [MENTION=82969]Somerset12[/MENTION]

There are various options you could take on this matter. I appreciate you've sent 4 emails already and been told not to worry about it, but if you haven;t done so, you should explicitly ask the question, will you be liable to pay the neighbouring property 5% of the value of the property each year. The property value is likely to mean the value of the house, unless defined as something else.

Your options could be as follows:

1. Negotiate the removal of the covenant, which may come at a cost of sorts

2. Obtain an indemnity insurance, this will cover you in the event that the covenant is enforced against you. Costs are probably going to be high if the covenant is likely to be enforced but given the age of the covenant and that it is not being used anymore, then it could be likely that the cost of obtaining insurance will be lower.

3. Apply to the Upper Tribunal to discharge the covenant and again this is at the cost of making the application and/or instructing solicitors to do this for you. Your argument here would be that the covenant is obsolete and is not relevant anymore, both houses now have separate drainage and mains from the water company and given that the covenant was entered into in the 1940s is no longer required.

4. Subject to what you have asked in your email, you could proceed on the basis of advice from your solicitor of not needing to worry about it. In the event the covenant is enforced against you, you could take action against the firm of solicitors for professional negligence.

All 4 options come at a cost albeit they will vary in the amount of costs. You would be wise to investigate the first 3 options and what it could cost if you were to implement one of them, I would probably say option 3 is likely to get the better result for you. If you proceed on the basis of option 4 then be careful as it could be some time down the line that a covenant may be enforced and the firm of solicitors may not be around by then if they are small high street.

Hope that helps