Splitting property to address covenant for single dwelling house?

Splitting property to address covenant for single dwelling house?

8:19 AM, 14th October 2022, About 2 years ago 17

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I need some advice for a property I am buying, please. It is a corner plot house with an extra large garden extended to one side and back. Apparently, it is an ex-council property with a restrictive covenant of single private dwelling 1980 from the city council. The neighbour’s property is still owned by the council.

Per the architect, I can easily get planning approval for two new houses on the side extended garden (almost 10-11 meter front) but seems like my dream will not come true with this covenant in place. I was thinking of splitting the property into three ( one existing house and two at side garden areas).

Do you think the splitting idea may be the solution to the problem here? What happens in this kind of scenario? Will the authorities allow me to split the property but not let me build on those two newly titled empty plot properties due to the original property covenant?

Per my understanding, each title will have the same covenant but at least I can build single-dwelling houses on two newly titled plots.

Has anyone faced a similar scenario and what other possible solutions could address this other than asking the council to lift the covenant or an indemnity?

Many thanks

Martin


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Comments

RODNEY CRABB

10:09 AM, 14th October 2022, About 2 years ago

The council will probably lift the covenant for a Hefty fee
Like a ransom strip scenario

Graham Bowcock

10:10 AM, 14th October 2022, About 2 years ago

I think you are wrong that splitting the tile will allow one house per title; it doesn't work like that.
You need to make sure that title is good so that you can sell or mortgage. If you get it worn you can do neither, and may be liable to the council for the breach.
What you should do is negotiate with the council for the covenant to be lifted. They may not agree. Alternatively (and more usually) they will agree but want a share of the uplift in value. You need a good surveyor to negotiate wih the council on your behalf - it's complex and they need to understand value, costs, etc. to get a decent result for you.

Jerry stone

10:22 AM, 14th October 2022, About 2 years ago

I have done this twice.
One council charge £14,500 for a piece that sold for £48,000 and the other Local Authority did it for free.

Expect to pay a third of the value which is the laid down value of ransom strips.

It was agreed in a court case some years ago.

I would have a look at your Local Plan as I am also a Planner and some Architects are no as up
On Planning Policies as sometimes they could be.

This is not legal advice and you need to do your own research.

Graham Bowcock

10:52 AM, 14th October 2022, About 2 years ago

Reply to the comment left by Jerry Stone at 14/10/2022 - 10:22
Jerry is broadly right, but the 1/3rd is not an absolute given - it's a starting point that's actually based on a compensation case (Stokes v Cambridge if you're interested).

If the covenant is a total ban on development, then it's a horse trade as to how much will get paid. How desperate is the council for money (or how savvy are they - often they do miss the detail of these things)? How badly does the OP want to do a deal?

If you start at 1/3rd you need to know what it's 1/3rd of. Is there a base value? How are costs treated?

Rod

11:10 AM, 14th October 2022, About 2 years ago

In addition to Jerry and Graham's comments, take a look at the local plan to see what the council has committed to in terms of providing additional housing. You are effectively helping them meet this target!

A planning consultant would probably be your best bet in understanding the council's expected response and helping negotiate any payment.

Jerry stone

11:22 AM, 14th October 2022, About 2 years ago

Reply to the comment left by Rod at 14/10/2022 - 11:10
Your comments are partly correct however the 5 year housing land supply is not particularly relevant for this as it’s only two houses and it’s a residential area.

It would be a windfall allowance.

Planning would have nothing to do with payment.

Planning and covenants are completely separate items.

I am a planning consultant.

I happen to know about them because my business partner in my rental development business is a very good Property lawyer.

Martin

11:24 AM, 14th October 2022, About 2 years ago

Reply to the comment left by Graham Bowcock at 14/10/2022 - 10:10
Thanks Graham.. Then how splitting plan works. I was told by my solicitor that when you split, each splitted property would have same covenant, which I interpreted as I will be allowed to have single dwelling one each one. Do you the think it would not be the case? then what would be the outcome of that effort?
I am planning to go to council anyway and I don’t mind sharing profit/increased property value etc. with them but I am keeping that as option 2 if I fail in my splitting plan .

Jerry stone

12:03 PM, 14th October 2022, About 2 years ago

Reply to the comment left by Martin at 14/10/2022 - 11:24
The covern. Will cover all the land as one. Splitting the title will not address this.

Approach the Property department at the Council and check that they will lift the concern. Then deal with Planning.

Howard Michaels

12:19 PM, 14th October 2022, About 2 years ago

You need to get a good solicitor and get them to look at S84 of the Law of Property Act 1925.

Martin

12:20 PM, 14th October 2022, About 2 years ago

Reply to the comment left by Jerry Stone at 14/10/2022 - 12:03
Thanks Jerry, I have dumb question.. Should I contact council by myself or someone experienced is better because my solicitor doesn't seems to have expertise in it.
Do you recommend anyone well experienced in these type of matters ? Property is in East Midland region.
Thanks

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