Ask the Experts: Covenant Queries

  • Covenant Queries

My London solicitor is having a hard time getting his head round my intended purchase of a North Cotswold property. I am worried how various covenants and restrictions he’s highlighted will affect things when I sell. Is this common in the Cotswolds?

I have worked and specialised in residential property in the North Cotswolds for twenty years, and yes, it is a unique area of the UK! Basically, covenants are legal promises to do or not to do something during your ownership, usually restrictive and running with the land. Restrictions tend to be something that you need to comply with before you can proceed with your purchase or sale; its rare to see deeds without them these days and, generally, they are nothing to worry about - just to be aware of. Theyre intended for the benefit of the property and/or to maintain the natural beauty of the North Cotswolds. Here are examples of the most common issues in the local area:  

Section 157 Housing Act 1988 – Often found in Bourton, Moreton, Northleach etc., usually properties that formerly belonged to Cotswold District Council or Fosseway Housing Association, requiring you to have either lived or worked in the local area for more than three years in order to keep some housing stock for local people, enabling them to stay in their local area. Buyers need to apply to either the District Council or the Housing Association for consent to proceed. If you can prove you have lived and worked in the local area for the last three years this process is quite straightforward; I believe you can download the application forms from their website.   

Restriction on new developments – On completion of a purchase, a formal notice, called a Deed of Covenantwill be served to confirm change of ownership and the buyers compliance with covenants and restrictions. This restriction is an additional comfort in ensuring that outstanding Estate Charges have been settled and, thereforewhen you move in you wont be surprised by an invoice!  Usually found on larger new developments, this will include an Estate Chargea commitment to contribute to the upkeep and repair of communal areas of land - lighting, roads (if to remain private), recreational spaces, etc. A management pack will be provided, containing details of costs and the structure of the Management Company. As a resident you become a member and can attend AGMs to have your say on how things are run. 

Upper Rissington – This is a very unique ex-RAF site with its own private water supply, drainage etc. which, for a long time, was a real issue. Bradford Property Trust sold all the existing residential properties with a restriction in the deeds that, before a property could be sold again, the buyer must enter into a Deed of Covenant with the Management Company to comply with the covenants contained in the deeds; this included a small annual contribution to maintenance, supposedly collected by BPTs agents (who failed to do so much of the time). Many existing property owners therefore simply did not realise that charges were due until they came to sell. After Linden and Bovis Homes repaired and renewed the drainage and water systems, Albion Water finally took over adoption of the network in 2014. I do come across the odd outstanding charge these days, which I ensure are paid up to date on completion, when the buyer will also be required to enter into a separate Deed of Covenant to confirm compliance with the covenants contained in the deeds, of course. 

Stacey Ballinger is an Associate at Thomas Legal Group, where she runs one of the residential property teams. She has over 20 years' experience in property work, specialising in all aspects of conveyancing. Stacey has been working in this area since she qualified and has dealt with many thousands of property transactions. Stacey qualified as a Chartered Legal Executive in 2011 having worked in property law since 1997, working for two major law firms in the local area, before joining Thomas Legal in 2010. Stacey regularly undertakes professional development courses in residential property and other related areas of law. 

To contact Stacey, email stacey.ballinger@thomas.legal or call 01452 657973 

Visit Thomas Legal Group at www.thomaslegalgroup.co.uk