Restrictive Covenants
Restrictive covenants from which Homesteads benefits (see History), exist on estate properties developed in Southern England, since 1905, by Homesteads Limited, and, prior to that date, by William Carter or William Carter’s Estates. The restrictive covenants generally: (i) require approval of any alteration or rebuilding; (ii) restrict original plots to one house; (iii) limit land use to residential; and, (iv) set rules for boundary maintenance. Occasionally, there are additional road maintenance covenants.
In recent years, owners have experienced legal problems, especially with mortgagees’ solicitors, on proposed sales, in relation to these restrictive covenants, either where approval is required, or where an irreparable breach has occurred; Kinson Limited, acting for and on behalf of Homesteads Limited, has separate procedures for these two situations.
Where approval is required to alter or rebuild a single property under an existing covenant, the owners should contact Kinson Limited. For approvals Kinson Limited requires a copy of the plans and planning consent (where granted) and either a copy of the Land Registry title plan and register, or sufficient information in the form of a location plan to enable it to make its own title search. The fee for approval, if granted, is currently £900, and is VAT exempt. Retrospective approval can also, generally, be obtained in this way, where there has not been a change in ownership. Fees are payable in advance, and are charged for each application for alteration or rebuilding.
Where an irreparable breach has occurred or will occur, requiring covenant change or removal, owners (or purchasers) may either write to Kinson Limited, or instruct their solicitors to contact Homesteads Limited’s Solicitors.
Once the legal status has been clarified, Kinson Limited will instruct Surveyors to negotiate terms (to include an indemnity for legal costs) with owners for the necessary release(s) of covenant. As a rule, covenant release fees for antecedent breaches are 2% of the value of the property, plus legal costs. However, where there is a ‘development gain’, for example through creation of a sub-plot or plots within a plot restricted by covenant to one house, then 1/3 of the development value thereby arising is sought (precedent Stokes v Cambridge). Valuations are dealt with by Homesteads Limited’s Surveyor.
For the avoidance of doubt, Homesteads Limited’s Solicitors are instructed not to correspond with owners, only with owners’ solicitors, and an indemnity for legal costs is required before Homesteads Limited’s Solicitors commence any work. Kinson Limited will only deal in writing with owners or their solicitors.
Homesteads Limited has, in the past, entered into collective arrangements, either with a residents' association, or solicitors representing multiple clients, to remedy certain antecedent breaches.