Permissions, Consents and the two questions you need to ask yourself if you feel you may be affected by either
Confusion often arises regarding what permissions and consents are required when you’re having work done on a property.
One of the biggest misconceptions relates to covenant consent by a previous owner, property developer or Local Authority. Many people believe that covenant consent is the same as planning permission. To add to the confusion, covenant consent is occasionally required from the same local authority that provides the planning permission.
Sellers often tell us they have planning permission. They have assumed that covenant consent was not required. “As the local authority already know about the works”. This is definitely not the case, so it is vital sellers are 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 vendor (or Local Authority/ builders/developers) to retain some control over what is built on the land or any changes made to the property. Before you undertake any works, you should contact the Covenantee 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. A property can also be subject to positive covenants which will apply to future owners. If there is a restriction on title requiring a Deed of Covenant to be entered into by a new owner.
Given there is a little confusion over permissions and consents we’d like to share two of the questions we’re frequently asked by buyers. Accompanied of course by the answers we tend to give:
1. What action do I need to take before any work is carried out?
If you are planning to undertake any major alterations or additions to your property, it is always a good idea to first check the title to your property before the work starts 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 it 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 includes this covenant in most of their Transfer Deeds. This can cause some confusion to future buyers and sellers.
2. What do I do if work has already taken place without covenant consent?
If you have already carried out works to 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 insurance 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 reduction in value of the property. This policy would only relate to any previous works. It 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 the seller contacting the relevant party, informing them of the work. Then 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. You should be aware that once retrospective consent has been requested then the first option of obtaining indemnity insurance would not be possible. This is because the Covenantee would be aware that the work had been undertaken.
However, as a general rule, we would always recommend that in the first instance you check your deeds. This is to see whether covenant consent is required.
If you have any questions regarding covenants permissions and consents on any aspect of buying or selling a house please email Melanie.email@example.com or call Melanie on 0113 399 3448.