Removing a historic covenant from property deeds

[dealtn]

Just because it hasn't been mentioned doesn't mean it doesn't exist.

so its total supposition? It could be 80K. It could be 80p.

Oh...

Why is it total supposition?

What assets do you know where altering the financial cashflows don't have an affect on valuation?

I see you declined to answer which of the 2 investments I described earlier in the thread you would prefer.

Are you suggesting 2 properties in identical locations would be valued the same if one had a service charge of £100 pa and one had a service charge of £5,000 pa? That's not how property valuations and actual property transactions work.

So, without knowing the details of what the property is worth, or what the restriction actually is, it is difficult to know. I would expect it extremely likely its neither £80k or 80p though. Equally unlikely is your reputed "nothing".

This is a "practical" board, and someone asked how to remove a clause, and whether there was any benefit. All I am doing is pointing out there are potential benefits, perhaps to others, and perhaps to the property owner too. Denying that isn't practical or helpful to the OP in understanding how they can be removed, and at what cost.

[Arborbridge]

Why should one party to a contract get to save £400 p.a. which might increase the value of the asset by say £8k? It might be historic, and an anachronism (without full details we can't be sure), but that doesn't automatically mean it should be removed at nil cost. Annoying though it is. What other contracts, legal under law, should such treatment be allowed for?

OK, lets look at this way.

Please send send me £400 a year - and I promise i'll do absolutely nothing in return. Seems fair.


didds

Why does it have to be fair? It is grossly unfair, but so are many things in life. I happen to think the covenant is anachronistic and blatantly unfair in this case but it would be equally "unfair" on the people who depend on the income for any third party to forego it without compensation? The church has a duty to fulfill its own obligations, and that is what it is doing. I cannot see the "religious" or "greed" argument advanced by people here has any validity.

It's a dreadful position to be in (like those houses doomed by convenant to pay for repairs to the local church they never go in) and bouleversee has my absolute sympathy, but.... it's a convenant and why should one party be allowed to escape it to the detriment of the other?

Arb.

[staffordian]

Why does it have to be fair? It is grossly unfair, but so are many things in life. I happen to think the covenant is anachronistic and blatantly unfair in this case but it would be equally "unfair" on the people who depend on the income for any third party to forego it without compensation? The church has a duty to fulfill its own obligations, and that is what it is doing. I cannot see the "religious" or "greed" argument advanced by people here has any validity.

It's a dreadful position to be in (like those houses doomed by convenant to pay for repairs to the local church they never go in) and bouleversee has my absolute sympathy, but.... it's a convenant and why should one party be allowed to escape it to the detriment of the other?

Arb.

The counter argument to this perfectly valid viewpoint is that maybe whatever the reason for the covanent was i.e. the benefit, if any, which the occupier once enjoyed in exchange for the payment, might no longer apply.

Perhaps simplistic, but lets say you enter a contract to pay £50 per month to a supplier of electricity, would it be right or fair to have to continue to pay this £50 if the company no longer supplied the electricity?

[Mike88]

What would happen if you and the neighbours refused to pay on grounds that the covenant is no longer relevant and brings no benefit to any of those required to cough up?

[UncleEbenezer]

£400/year puts it in a similar league to a ground rent. I believe with ground rents there are (in many circumstances) rights to buy out the freehold interest, and a statutory formula to determine the cost of doing so.

Maybe there'd be some mileage in proposing to the beneficiary that you buy out their right to the £400 at a price determined by the formula for ground rents?

[Clitheroekid]

The thread seems to have rather wandered off into the thicket, but I've (again!) been soaking up the Ibizan sun, and am only just catching up.

Firstly, the link to the Checkatrade sight is somewhat misleading. Those `prices' are actually statutory fees charged by the ludicrously named First Tier Tribunal (Property Chamber) - why they couldn't just have left it as the Lands Tribunal God alone knows. This means they're like court fees that have to be paid if you want to sue someone.

But just like suing someone, paying the court fee is one thing; paying lawyers to prepare and handle the paperwork is quite another - and a lot more expensive.

You might say you could do it yourself, but the law of restrictive covenants is one of the most complex areas of law there is, and most lawyers struggle with it. The chances of even a highly intelligent and well-educated lay person actually succeeding are very small.

In any case, it's impossible to say what the prospects of success would be without knowing exactly what the covenant says and analysing the benefit / detriment that its removal would cause.

However, you ask what the cost would be

if this were done with the agreement of the beneficiary

In that case you're talking about a Deed of Release, which is relatively simple to deal with. The legal costs would probably be less than £1,000, though each covenantor would have to pay to have the release noted against their own title at the Land Registry.

I'm confused by the reference to the £400 a year though. That makes it sound more like a lease, but you say that the freeholds were all sold off years ago (implying they were originally leasehold titles) in which case what's the £400 for? Is it some form of service charge, who receives it, and what do they do with it?

I'm sorry I can't actually answer your question, but as with many such questions the inevitable answer is `it all depends ...' However, if the beneficiary really is willing to release it there would be no need for any application to the Tribunal or anyone else, so it may be an easier process than you think.

[Bouleversee]

Lucky you. Ck. I haven't had a holiday since 2009.
Thank you for your informed comments. Sounds like money for old rope so far as the lawyers are concerned. No wonder newly qualified lawyers now earn £107k p.a.
I didn't want to go into too much detail but I should make it clesr that £400 p.a. is not a fixed amount. The charge is a percentage of the vsriable amenity charge and road charges (inc. sinking fund for latter) salary and pension of the estate manager, and legal fees for a village in which I do not physically live. When we bought the house, we were told by the previous owners that the charge was about £100 but it turned out that that only covered the road charges and the total, which varies a bit from year to year, is now around £400 which I think is quite a lot when I get no benefit whatsoever. However, it is the fact that I or my successors in title would have to apply to the village planning committee for permission to do anything to the house (paying more than the council charges) which bothers me rather more as it might scupper a sale at the last moment by me or my heirs. Yes, we should have gone into this more when we bought but we were both quite ill at the time (my husbsnd has subsequently died) but I think our solicitor should have pointed out the implications as well, considering the fee he charged. We didn't offer less on this account for this reason but I accept that others may have done so.

Having read the comments of some of the posters on this thread who think it's perfectly ok for the CofE to charge a fortune to remove a totally irrelevant clause when the church concerned no longer even exists and where there is no loss of income, which in my view is simply extortion, I realise I am on a hiding to nothng so, since I am about to be 85 and have health issues, I won't waste any more time over trying to achieve justice for self and neighbours and concentrate on getting my affairs in order instead. I managed to get probate for my husband's quite complex estate withiut legal help but this could be even more difficult. I am reminded of the lengthy correspondence I had with various members of the govt. before we got independent taxation of wives' investment income. Sadly, I haven't enough years and energy left to fight another such battle for what I believe to be justice and commonsense. Howevrr, it would be interesting to know what that easier process to which you refer entails, on the offchance that the powers that be see the light..

In answer to Mike 4: If I didn't pay the charge, they could put a charge on my property which would prevent a sale till paid.