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Restrictive Covenant

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  • Restrictive Covenant

    We are in the process of buying a cottage that we have found out has a restrictive civil covenant in the deeds
    "2.Not to alter the external appearance of the Property or erect or suffer to be erected any structure building or dwelling or to carry out
    any development on the Property as defined by the Town and Country
    Planning Act 1981 or any statutory re-enactment or modification thereo."
    Which our solicitor has called absolutely restrictive, and advised us that she should contact the vendors solicitor to then contact the person concerned with applying this covenant in 1992 (who then sold it to vendors father)
    We have just heard through the estate agent that the vendors will not take any action to have the covenant removed and advise us to take out indemnity insurance on the covenant being civilly enforced.
    We do know that the planning authority would let us do the rear external work that we propose should the sale go through.
    Question is can we take such an insurance out and does it mean that we are covered if the person or his estate who applied the covenant should take civil action against us?
    Many Thanks in advance!

  • #2
    Indemnity insurance cover will be available in respect of the existing breach of covenant (ie: the existing cottage) if -
    - the breach has been in existence for at least 12 months and
    - there have been no alterations to the property in the last 12 months and
    - there have been no objections or disputes in relation to the restrictive covenant during the whole period of the seller's ownership and
    - neither the seller nor you have approached the person entitled to the benefit of the covenant (which is why the seller will not make the approach)

    However, this insurance will not protect you against future breaches - eg: your planned rear external work. Further, carrying out that planned work may well void any indemnity insurance cover you do put in place. The reason for this is that carrying out further work constitutes a further breach, giving the person with the benefit of the covenant a fresh cause of action

    If you did not want to alter the property, you might be happy to buy it with indemnity insurance cover - but please note that the existence of the covenant will affect its resale value.

    If your planned works are important to you, I suggest you find another property

    I hope this helps
    This is based on my experience as a conveyancing solicitor in England, but I do not accept liability for information I give in this forum