When we are instructed to act for a client to sell their property there is sometimes confusion over what permissions are required for work that has been carried out on the property. One of the biggest misconceptions relates to covenant consent by a previous owner or the developer of a property. Many people believe that covenant consent is the same as planning permission. To add to the confusion, occasionally covenant consent is required from the same local authority that provides the planning permission. Sellers will often tell us that they have the planning permission so they have assumed that covenant consent was not required “as the local authority already know about the works”. This isn’t the case and it’s vital for sellers to be aware of the pitfalls of not gaining covenant consent.
Developers may impose restrictive covenants preventing alterations or extensions without consent. The purpose of the consent is to allow the original vendors (or builders/developers) to retain some control over what is built on the land or changes made to the property. You should contact the Covenantee (the person with whom the agreement is made) before you undertake any works and obtain the consent prior to the work beginning. Typically consent cannot be refused if your request is reasonable. However, you should be aware that in some instances the Covenantee will request a small fee before they will provide consent. Restrictive covenants run with the land regardless of who owns the property and a property can also be subject to positive covenants which will apply to future owners when there is a restriction on title requiring a Deed of Covenant to be entered into by a new owner.
Actions to take before any work is carried out:
If you are planning to undertake any major alterations or additions to your property then before any works start it would be a good idea to first check the title to your property to see if covenant consent is required. There will be a reference in the title which will read along the lines of “not to make any alteration or addition to the property without the prior written consent of the vendor.” This is a common clause in Transfer Deeds provided by developers for newly built properties but can also be found in the deeds of older properties. It is also commonly found in Transfer Deeds where a former council house tenant has purchased the property. The local authority include this covenant in most of their Transfer Deeds and this can cause some confusion to future buyers and sellers.
What if work has already taken place without covenant consent?
If you have work undertaken at your property and have not obtained covenant consent then in the most extreme cases a court can make you reinstate the property to the same state it was in prior to the works being undertaken. However, in most cases, a seller would have two options.
- Option 1: Provide the buyer with an indemnity policy in respect of breach of covenant.
This would provide cover for the buyer in the event that a Covenantee challenged the work that had been undertaken by the seller. The indemnity policy put in place on completion would cover the buyer in respect of matters such as legal fees and any potential devalue of the property. This policy would only relate to any previous works and would not provide cover to the buyer or any future owners of the property to carry out further works.
- Option 2: Obtain retrospective consent from the Covenantee.
This would involve them contacting the relevant party, informing them of the work and asking for consent to be provided even though the work has been completed. The Covenantee may request sight of plans and work specifications and would almost certainly require a fee. Once retrospective consent has been requested then the first option of obtaining an indemnity policy would not be possible as the Covenantee would be aware that the work had been undertaken.
We would always recommend that in the first instance you check your deeds to see whether covenant consent is required.
Contact usfor advice on covenant consent:
For more information on covenant consent or advice ahead of carrying out work on your property, please contact Sara Williams in our Residential Property team on 01244 305917.