Kind regards,

Gemma

Many thanks for your email.

One of the questions that a conveyancing solicitor should ask is whether or not the covenants affecting the property have been complied with. The solicitor should also check for evidence of compliance, even if the Seller answers that they have complied. For example, if the Seller said yes, and the solicitor could clearly see that an extension had been added to the property, but the Seller had not produced a copy of the necessary consent that was required from the original Builder under the terms of the deeds affecting the property, then he would ask that the consent was produced.

Covenants are usually clearly evident from the title deeds affecting the property and a conveyancing solicitor reads through all the deeds to see what enquiries are necessary and to ascertain whether or not there is anything contained in them that would affect you and/or your mortgage lender adversely in the future.

Certainly you should be advised when you buy a property that there are covenants affecting the property, the terms of them and whether or not they appear to have been complied with. You should also be asked to read through them so that you know what they say and so that you can consider whether or not you believe that there may have been any breaches. Yes you should also be informed that you would become liable for any such breach once you purchased the property.

Ideally, I would like a little more information as to the circumstances before giving a definitive answer but from what you say, it suggests that the conveyancing solicitor may have been negligent and in such circumstances, you could certainly send a letter of complaint to them and insist that they pay for indemnity insurance. The other alternative is that the Seller gave false information as to compliance and your solicitor had no way of knowing that the information was false, as the breach was not readily apparent.

The difficulty with indemnity insurance is that you can only put it in place if the person with the benefit of the covenant has not been made aware that the breach exists. This is another issue for you to consider, as I do not know your particular circumstances. It may be possible even if the person is aware of the breach to get insurance but you would need to ask individual insurance companies whether or not they would be able to offer a bespoke policy to you.

The best suggestion I can make is that you go back to your original solicitor and tell them of the problem you are having and ask why you were not made aware of the breach when you bought the property, then take it from there. They may have even put indemnity insurance in place and simply not informed you, but you will not know until you ask. If it appears that they have been negligent, make your complaint in writing to their complaints department, insisting that they rectify the problem and that they accept the cost of doing so.

I hope this information is of some assistance to you – best of luck!

Gemma

Is the conveyancing solicitor(s) responsible for checking covenants through the normal searches and advising the buyer what action needs to take place?

We bought a house and there appear to be clear breaches of a covenant on the plans submitted to them. They didn’t advise us that we needed insurance or that we would take on the liability for the breach should we proceed with the purchase.

Would the conveyancing solicitor now be liable for the costs of putting right the breach?

Thanks
Pat

“I see more and more cases where people have bought a property and their conveyancing solicitor at the time has not made them aware that covenants affect the property”

Absolute nonsense. I’ve been a conveyancer for the last 12 years, and in all of that time, and in each and every firm I’ve worked for, clients are advised in Reports on Title of covenants. Attention is drawn to the covenants, emphasis is put on the fact that those covenants will bind them throughout their ownershp and that failure to adhere to them may result in a breach, which can be difficult and costly to remedy. Clients are then invited to raise any questions directly with you should they have any.

It is most certainly the case that, instead, clients are advised, but then, quite conveniently, ‘forget’ about the covenants, or trivialise their importance.

It must be understood, also, that indemnity insurances are not a remedy to the problem itself. They are merely a sticky-plaster over the problem that allows buyers to buy and, more importantly, mortgage lenders to lend. Without either rectification of the breach, or the indemnity insurance in place, the conveyancing solicitor cannot confirm its Certificate of Title to the lender and cannot drawdown the mortgage. The indemnity insurance also doesn’t mean that the covenantee (person with the benefit of the covenant) won’t try to take enforcement action, but rather that the insurers will pay out (provided the terms of the insurance are met) should enforcement action be attempted.

Kind regards

Terry

Provided that there has been no action taken by the person who has the benefit of the covenant and provided the seller has received no notice that such action will be taken in the future, it should be possible for your solicitor to insist upon restrictive covenant indemnity insurance being put in place at the seller’s own cost. Either that or you should insist that the seller remedies the defect before you proceed to exchange contracts. The difficulty is that if you did proceed to buy the house without rectifying the problem, then in theory, you will become responsible for the breach and would potentially face action being taken against you. I assume from what you say that a building/alteration/extension has been added without obtaining permission under the terms of a covenant. A further difficulty would be that if you are obtaining a mortgage, no mortgage lender would be willing to proceed without the breach has been remedied either by obtaining retrospective consent or indemnity insurance as mentioned above. Your solicitor will be duty bound to point out the defect to the mortgage lender. The easiest remedy is certainly insurance, because this can be put in place by the seller on completion and it is usually done via an “instant issue” policy written out by the solicitor. In terms of putting in an offer, there is no reason why you could not do so; however, you would need to make sure that your solicitor deals with the breach of covenant so as not to leave you open to court action in the future.

If you need any more help on this, please let me know.

Compliments of the Season,

Gemma