Covenant issues
Restrictive covenants are often imposed by previous owners of the property to prevent buyers from using the property in certain ways. This could prevent the erection of buildings or structures on the land, or even making alterations to an existing property. A lot of time, people buy a new property without knowing whether there are restrictive covenants affecting the property or whether they have already been breached.
- Case study 1: Essex panic over restrictive covenants
- Case study 3: Covenant prevents homeowner from building an extension
- Case study 2: First Title claim example
Essex panic over restrictive covenants
http://news.bbc.co.uk/1/hi/england/2297079.stm
Hundreds of homeowners in Chigwell have been sent letters suggesting they pay thousands of pounds to the Earl of Stradbroke, who lives in Australia and whose family had once owned the land, as their homes could be subject to covenants dating back to hundreds of years. To avoid paying huge legal bills and being involved in court action in the future, homeowners were asked to consider paying 1% of their homes' value. Much of the land in the area was sold with restrictive covenants relating to building extensions and garages.
Covenant prevents homeowner from building an extension
http://www.thenorthernecho.co.uk/business/columnists/echolaw/8184170.Nagina_Hussain__Buyers_should_be_aware_of_covenants
Thecase Davies v Dennis shows how broad-ranging restrictive covenants can be. In this case, Mr Davies was prohibited from carrying out an extension to his property on the basis that it would result in annoyance or nuisance to other residents. Central to the argument was wether the covenant not to do anything that may be a nuisance or annoyance applied to the erection or extension of a building. The Court of Appeal agreed with the neighbouring residential plot owners by confirming that the covenant was wide enough to extend to all activities carried out and an injunction was granted preventing Mr Davies from building an extension.
First Title claim example
First Title provided cover against being unable to enforce covenants to compel the owner of the top floor/roofline to carry out repairs and maintenance to the common areas. The guttering was in a serious need of repair, and despite repeated letters and communications, the owner of the top floor/roof line refused to co-operate. This resulted in water overflowing and caused tens of thousands of pounds worth of damage to the property. The policy covered the cost of sending letters to the owner of the top floor/roof line, seeking advice from Counsel, paying for a survey to be carried out and the cost incurred for the insured carrying out the repairs themselves and if need be, pursuing the owner of the top floor/roofline for reimbursement.
The insured said: "I am so grateful for all the friendly and concerned help you have given me. I really think I would have gone under by now if you hadn't been so kind. It is a blessed breathe of fresh air that First Title conducts business with such integrity."