Another covenant question

[tango2082]

Evening all,

I'm purchasing a property which is a ex-council house purchased under the right to buy scheme in I think around 1980. When the council sold it they included a restrictive covenant to state any internal building work requires the authority of the 'Director of Housing of the Local Authority'.

I'd like to remove an internal wall, so I emailed the Local Authority to ask about the Covenant - is it something they'd still enforce and if so, how/who do I need to request permission from. The emailed back basically stating if it's a load bearing wall then I require building regs permission (I haven't had it surveyed yet to find out if it's load bearing) But they sold all their housing stock to a private company to manage, and I should approach them about the Covenant.

This seems wrong, it was never a property owned by the Private Company and the Covenant specifies permission must be granted from the Local Authority. I see there was a recent land tribunal ruling that states many Covenants such as this are unenforceable, however I don't want to assume this. I want to try and do things the right way so that when I come to sell the property, a 'breach' of Covenant won't be an issue.

Any suggestions? I'm thinking I either need paperwork giving permission for internal alterations or paperwork stating this particular point in the covenant would no longer be enforced...I just don't know where to start in getting this?

Thanks,
Tango

[Clitheroekid]

When the council sold it they included a restrictive covenant to state any internal building work requires the authority of the 'Director of Housing of the Local Authority'.

If that's what it says then I'd take the view that there's no need - or indeed any point - in seeking permission from the private company, as they are unable to give consent on behalf of the local authority.

When the covenant was inserted I doubt anyone in the local authority remotely contemplated the carnage that would take place in public housing, still less that the local authority would ever be forced to sell off their interest to a private company.

I would therefore be inclined to treat the covenant as one that is now obsolete and incapable of being enforced. We often come across restrictive covenants in deeds that were made with development companies that were dissolved decades ago, and as they are no longer enforceable they are simply ignored.

However, that's the common sense approach. Sadly, as common sense has long since been abandoned in conveyancing you're quite right to think that it could be a problem when you come to sell.

The usual solution is an indemnity insurance policy, but unfortunately by contacting the Council you may have rendered it impossible to obtain one, as it's usually a condition of such policies that you must not contact anyone who may be able to enforce the covenant. Your conveyancer should be able to advise you regarding this.

In any case, indemnity insurance only covers existing breaches, not future ones, so if you ever wanted to make alterations that would be caught by the covenant you'd face the same problem when you sell.

The very best solution is to have a Deed of Release executed by the private company releasing the covenant permanently, but I doubt the vendor would be willing to cough up for that, even if the company were to agree to it. Alternatively, ask the vendor to obtain a letter from the private company confirming that they will not attempt to enforce the covenant, though I expect this will also be met with some resistance, as private companies like this often seek to exploit such situations with demands for extortionate payments.

But the person you should really be asking is your conveyancer. It's their job to come up with solutions to problems like this so what do they have to say about it?

[didds]

If that's what it says then I'd take the view that there's no need - or indeed any point - in seeking permission from the private company, as they are unable to give consent on behalf of the local authority.

CK is I am sure spot on. But I'd ask then why this isn't a case of the private company acting as an agent on behalf of the LA and thus being in effect their surrogate for all things housing?

I ask for my own education only

didds

[tango2082]

Thank you CK for your detailed reply, it's much appreciated!

If it is only a stud wall is removing it still considered 'building work'? It's been suggested to me that for legal purposes, building work is only structural alterations to the house.

If it is a structural wall, is it too simplistic to take the view that if I apply for permission under Building Regs, and the council grant authority, this is in effect, them granting permission and therefore negating the Covenant?

Regards
Tango

[Clitheroekid]

If it is only a stud wall is removing it still considered 'building work'? It's been suggested to me that for legal purposes, building work is only structural alterations to the house.

I would tend to agree with that view. The only justification for a covenant like this is to prevent the owner of the house carrying out work that might damage its structural integrity and endanger neighbouring properties. I wouldn't think that removing a stud wall would pose any such risk, so that it would be of no concern to the covenantee (the person with the benefit of the covenant).

If it is a structural wall, is it too simplistic to take the view that if I apply for permission under Building Regs, and the council grant authority, this is in effect, them granting permission and therefore negating the Covenant?

Unfortunately, yes, it is too simplistic. This is quite a common situation, and the answer is that the Council is actually wearing two hats.

The first is as a public body responsible for enforcing planning law and Building Regulations. The only considerations it can apply to a planning / Building Regs application are those specifically covered by the relevant law. Any covenants that may affect the property are of no concern whatsoever.

The second is as a private landowner. As such, whether or not a covenant can be enforced is a matter of private law, and the same principles are applied to the Council as they would be to you or me.

Consequently, absurd as it sounds, a Council may in theory be forced to grant planning permission under planning law but may then enforce a restrictive covenant preventing that development under private law.

In practice, though, it's hard to believe that a Council would try to do so, particularly since a 2008 case, Re Alisha House [2008] EWLands LP_83_2005, where the Lands Tribunal effectively said there was no justification for doing so.