The Lemon Fool

Does anyone know what the likely cost would be of removing an idiotic covenant from the Deeds of several properties if this were done with the agreement of the beneficiary, in this case a society registered under the Co-operative and Community Benefit Societies Act 2014, following a general meeting? What would be the chances/costs of getting the covenant removed without such agreement on grounds of being unfair, unreasonable and an anachronism?

Is the covenant still relevant?

Example; Where we lived previously there was a covenant that we maintain a two-strand barbed wire fence around the property. When built in 1920, it was surrounded by grazing fields, long swallowed up. So the covenant had become irrelevant and there would be no point in removing it.

The covenant you mention may seem old hat and irritating, but is it still relevant, and if not what would be the purpose of removing it?

As to costs, some sample fees given here https://www.checkatrade.com/blog/cost-guides/cost-remove-restrictive-covenant/
Looks like four figures... perhaps relatively trivial if all affected owners chip in.

V8

Many thanks, 88VB. Rather complicated to explain and am rushing off for a jab. It's legally valid but unfair and an anachronism but your info re costs will be useful in deciding whether it's worth pursuing. Depends how many of my neighbours would support (it affects them also) and whether the beneficiaries play ball.

We did have a church property as a neighbour and we have a restriction to do with not disturbing them on Sundays.

When the property was sold for non church related purposes I enquired about having the covenant removed (more out of interest than anything).

The reply to my solicitor from the CofE representatives in about 2002 was £40K + costs, fees + VAT and an unlimited cost indemnity upfront .

Needless to say I have avoided disturbing my church neighbours on Sundays since then (even though they don't exist in this Earthly realm!) .

Sobraon wrote: Needless to say I have avoided disturbing my church neighbours on Sundays since then (even though they don't exist in this Earthly realm!) .

Let sleeping dog-collars lie Thanks for the chuckle!

Sobraon wrote:We did have a church property as a neighbour and we have a restriction to do with not disturbing them on Sundays.

When the property was sold for non church related purposes I enquired about having the covenant removed (more out of interest than anything).

The reply to my solicitor from the CofE representatives in about 2002 was £40K + costs, fees + VAT and an unlimited cost indemnity upfront .

Needless to say I have avoided disturbing my church neighbours on Sundays since then (even though they don't exist in this Earthly realm!) .

Unbelievable greed to demand so much for nothing at all. Another reason for not being religious.

As it happens there is a religious (but not CofE) connection in my case too but I am actually having to cough up around £400 p.a. (rising) for absolutely nil benefit and would have to apply for planning permission to the organisation if I wanted to do anything to my house even though it (and the other houses in my lane) are no longer near any other properties/roads they own and they do not maintain our road or provide any other service for us since they sold all our freeholds many years ago, long before I moved here. To make matters worse, the houses on the other side of our road are not subject to this clause and do not have to pay anything. However, I'm probably banging my head against a brick wall unless I can persuade the management that it is totally unfair that this clause remains after so many years and life has moved on since it was included. Why I should have to pay for the immaculate maintenance of their roads etc. at the same time as battling with the council for months to get multiple potholes badly filled in mine is beyond my comprehension.

Bouleversee wrote:
As it happens there is a religious (but not CofE) connection in my case too but I am actually having to cough up around £400 p.a. (rising) for absolutely nil benefit and would have to apply for planning permission to the organisation if I wanted to do anything to my house even though it (and the other houses in my lane) are no longer near any other properties/roads they own and they do not maintain our road or provide any other service for us since they sold all our freeholds many years ago, long before I moved here.

Huge sympathies. Amongst the many annoyances in life there can be zero justification for this sort of historical scenario. Frankly, and IMHO, this is tantamount to theft.

Grrr.

didds

didds wrote:

Bouleversee wrote:
As it happens there is a religious (but not CofE) connection in my case too but I am actually having to cough up around £400 p.a. (rising) for absolutely nil benefit and would have to apply for planning permission to the organisation if I wanted to do anything to my house even though it (and the other houses in my lane) are no longer near any other properties/roads they own and they do not maintain our road or provide any other service for us since they sold all our freeholds many years ago, long before I moved here.

Huge sympathies. Amongst the many annoyances in life there can be zero justification for this sort of historical scenario. Frankly, and IMHO, this is tantamount to theft.

Grrr.

didds

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?

Bouleversee wrote:

Sobraon wrote:We did have a church property as a neighbour and we have a restriction to do with not disturbing them on Sundays.

When the property was sold for non church related purposes I enquired about having the covenant removed (more out of interest than anything).

The reply to my solicitor from the CofE representatives in about 2002 was £40K + costs, fees + VAT and an unlimited cost indemnity upfront .

Needless to say I have avoided disturbing my church neighbours on Sundays since then (even though they don't exist in this Earthly realm!) .

Unbelievable greed to demand so much for nothing at all. Another reason for not being religious.

[quote]

Not a very good reason for not being religious and in any case there may be more to it than what has been disclosed.

Dod

dealtn wrote:

didds wrote:

Bouleversee wrote:
As it happens there is a religious (but not CofE) connection in my case too but I am actually having to cough up around £400 p.a. (rising) for absolutely nil benefit and would have to apply for planning permission to the organisation if I wanted to do anything to my house even though it (and the other houses in my lane) are no longer near any other properties/roads they own and they do not maintain our road or provide any other service for us since they sold all our freeholds many years ago, long before I moved here.

Huge sympathies. Amongst the many annoyances in life there can be zero justification for this sort of historical scenario. Frankly, and IMHO, this is tantamount to theft.

Grrr.

didds

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?

That of course is the point. There may be nil benefit to Bouleversee but there certainly is to the counterparty, and it is surely right that they should be compensated in the event that they waive that benefit. It reminds me of the feu duty that used to apply in Scotland. That amounted to more or less the equivalent of ground rent. It was abolished some years ago, in most cases by making an upfront capital payment. There was no logic to it either but it persisted for a long period of time.

Dod

dealtn wrote: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

Presumably Bouleversee knew about the covenant and the financial consequences of it when she moved in but the only way to move it forward would be to seek legal advice I would imagine. Of course a chat with the beneficiary might be useful as well but as dealtn says, why would they agree to wave their income without compensation?

Obviously full knowledge of the whys and wherefores would be essential before doing anything.

Dod

didds wrote:

dealtn wrote: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

If only it were that simple. I wouldn't mind paying £400 p.a. if they didn't meddle in what can be done with my property (and charge more than the council does for planning applications and reapplications) which might scupper a sale at the last moment. It would be nice to have that £400 to spend on garden help; not sure how I'll cope with that when I have oxygen tubes up my nose which may be imminent. Still, the stock market is bound to provide the necessary in these calm and ever more productive times so why worry.

didds wrote:

dealtn wrote: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

No, I disagree, that doesn't seem fair.

What about if I offer you the chance to buy an asset at either £92k with an income stream of £5k p.a but you have to pay me £400 pa as a service contract (undefined). Or, alternatively, I will sell you the same asset, with the same income stream of £5k but with no service charge, but it will cost you £100k.

Which would you choose? I'm not sure, particularly with an undefined service charge, you will know which is the better deal. Neither would I.

If you choose option A, and then at some time later you think the £400pa service charge is unreasonable, how would you challenge it? To who? How would it get removed, and would that be at zero cost to you? Surely it would depend what is in the contract, and be subject to contract law. I'm not convinced by an argument (without knowing all the relevant facts) that there is "zero justification" or there is "unbelievable greed to demand so much for nothing at all".

Both "zero" and "unbelievable" are at extreme points on the spectrum of possibilities. Without evidence I would naturally tend to think the actual position is somewhat less extreme and placed somewhere else on the spectrum of possibilities.

Dod101 wrote:Presumably Bouleversee knew about the covenant and the financial consequences of it when she moved in but the only way to move it forward would be to seek legal advice I would imagine. Of course a chat with the beneficiary might be useful as well but as dealtn says, why would they agree to wave their income without compensation?

Obviously full knowledge of the whys and wherefores would be essential before doing anything.

Dod

The beneficiary is not an individual but an association. I wouldn't dream of doing anything unless I had the management and my neighbours onside and wouldn't expect the former to pay the costs. Hence the question in my o.p. The answer to Dod's question is "because it would be the fair and decent thing to do in the changed circumstances" but I can see from two of the responses to Sobraon's post that I am living in cloud cuckoo land and probably whistling in the wind. I naively thought that religious organisations would have higher principles and would not support extortion.

but what am I getting for my £400 a month?

apart form the square root of nothing?

As was it seems the OP when he bought his house - the frreehold had already moved on. there were no services being offered at that time to him either for his monthly payment?

didds

didds wrote:but what am I getting for my £400 a month?

apart form the square root of nothing?

As was it seems the OP when he bought his house - the frreehold had already moved on. there were no services being offered at that time to him either for his monthly payment?

didds

In my example above you "got" a £8k discount in the price of the asset.

There are many examples where restrictive covenants in property give a lower purchase price, sometimes very meaningful ones too. Look at those that have restrictive agricultural use, for instance.

It could also be you originally "got" the benefit of always being in a well kept area, no factories allowed, plus many others too. Again the OP hasn't furnished us with all the details. It could be these benefits no longer exist following the sale, and lack of enforcement of the "flipside" of the restrictive covenant. I don't know, neither do you, which is why until I do I wouldn't choose an extreme position on the spectrum as described.

where did this 8K saving come from? The OP hasnt mentioned it ?

didds

didds wrote:where did this 8K saving come from? The OP hasnt mentioned it ?

didds

Exactly, we haven't been given enough details to know. Without it you can't expect an accurate answer to the question "what am I getting for my £400 a month" (and saying its "nothing").

The point is the £400 pa obligation was there at purchase and should have been known about, not just to this buyer, but all potential buyers (and the seller). Whether you get anything, or indeed nothing, for it, would also be known. So the price of the house would have included the net cost (or benefit). If it didn't exist the price would be different.

If there is a true £400 pa cost, with no benefit, and all knew about it if you discounted this at say 5% it is worth approx. £8k. Without it a potential purchaser could pay £8k more for the same property. The current owner may well have saved that on purchase, and by removing it, potentially when selling that is added to its sale price.

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

dealtn wrote:
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...