by Ray George

In our Spring Newsletter, we referred to horror stories in the press about new-build housing being sold leasehold. You may think we have been using these to frighten residents and think that they have no relevance to our situation of older properties with fixed ground rents.

On the contrary, there is a local example of a company that uses restrictive covenants as a money making machine. £5000 was required for the sale of the freehold with a £5 per year ground rent. To be fair, if that is the right word here, it was to be unencumbered by covenants. £30,000 was demanded for approval to build a house. They did settle in the end for £2,500 which does suggest they weren’t too confident of their ground. Currently over £16,000 is being asked for breach of a covenant, made in the 1930s, by raising the roof. It is hard to see that the covenant which burdens the land touches and concerns the land purported to enjoy the benefit of the covenant. These last two examples are of freehold properties that were never leasehold.

How do they suddenly pounce on a breach of the covenants? Perhaps by keeping an eye on the online weekly list of planning applications in Southampton or they come to light when the property is being sold. A question asked in Enquiries before Contract is “Where restrictions have in the past required any person’s consent or approval of plans does the Seller have written evidence of that consent or approval?”.

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