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Restrictive Covenants

Buyers warned of restrictive covenants

By Anthony Irving  //  Wed 30th October 2019
A vigilant solicitor should identify any expensive burdens that could affect the value or sale of a property. “Searches during the conveyancing process should guard against the hidden costs.”
Homebuyers are being warned of archaic clauses in the title deeds to properties, which could prove expensive further down the line.

Restrictive covenants, prohibiting certain uses and alterations are frequently found in title deeds for UK properties. In new properties, they tend to be about preserving the character and amenities in a development. While rarer in older properties, covenants, which do exist could date back many years.

Conveyancers will usually flag up any major issues during the house purchase, but occasionally they don’t. Homeowners who breach a covenant, or unwittingly buy from someone who has, could be liable for large sums.

The Guardian reports on the cases of several buyers who have received demands because of restrictive covenants. In one case, the homeowners were billed for £45,000 because of a claim that a developer had breached a covenant by building their home and failing to seek the correct permissions.

In another case, a homeowner was at risk of losing the freehold to her property because of failure to pay an ancient sum, called a ‘rent charge’ which she had never been billed for.

Some householders also found themselves liable for ‘chancel repair liability’, a responsibility of landowners to pay for repairs to the local church, dating back centuries.

Avoiding such dangers is largely down to your conveyancer. According to Alison Sparks of solicitors Thomson Snell & Passmore a vigilant solicitor should identify any expensive burdens that could affect the value or sale of a property. “Searches during the conveyancing process should guard against the hidden costs.”

Buyers are advised to look at more than cost when choosing a conveyancing solicitor. The Law Society advises checking the solicitor is part of its Conveyancing Quality Scheme - the recognised quality mark for legal experts in buying or selling property.

Read more about this story in The Guardian.

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