Buying a property with restrictive covenant

[alchemist]

I am in the process of buying a 3-bedroom 1930s semi-detached house which was advertised as "There is space at the side to erect a garage or to extend the property (subject to usual planning consents)." My solicitor found that there is actually a restrictive covenant that no building can be erected and no extension is allowed to the side of the building. The agent told me that there are other buyers interested in the property and the vendor only reduced a few thousand pounds despite the restriction and that there will be no garage. I still like the property as I can still extend to the rear of the property and make a nice home, but am really worried about the future resale - the restrictive covenant may put off a lot of buyers. I wonder if anyone have similar experience? Would you buy a property with restrictive covenant?

[Richard Webster]

This kind of covnenat is very common so there is ahigh chancec that if you find another house to buy there could be a simialr covnenat. The point really is how likely it is that the covenant would be enforced. This will depend on local knowledge. In some cases a local solicitor will know that the covnenat holder is notorious for pussuing these (quite rare though) or he will know that if you send him some palns and a cheque for £50-£100 he will nearly always approve them as long as they are reasonable.

However, usually if they date back to the 1930s they aren't enforced, and if local knowledge doesn't help then you can folow one of the two couses of action set out below.

You can buy the house and build the garage and if nobody appears seekimng to enforce the covenant for a year then you can get a restrictive covenant indemnity policy - e.g for a proeprty worth £200-£250K this would cost £180 as a one -off with a leading indemnity insurer.

You can get such policies before you build but they are more expensive perhaps starting at about £750 and the insurer will want to know all the circumstances.

In reality OP is unusual in considering the point! I come across so many people who have happily built extensions without knowing about the restrictive covenants and it is only when they sell that the point comes up - "we got building regs, but because it was small we didn't need planning..." They don't realise they need consne tunder the covenants. I always explain it to people buying when this is the case but I am not sure how many people remember the explanations.