Covenants and insurance for a HMO?

Covenants and insurance for a HMO?

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Readers Question by Readers Question
12:02 AM, 3rd July 2023, 3 years ago 19
Categories:
HMO's & Student LetsInsuranceLandlord NewsLandlords QuestionsLettings & Management

Hi, I am in the process of purchasing a freehold house, which has covenants attached to the land. One of the covenants doesn’t allow for a HMO.

The beneficiary (limited) company cannot be found at Companies House.

Can someone tell me:

Can the covenants be deemed unenforceable?

Is it possible to seek an order to declare that the covenants are unenforceable from a County Court? If so, is it practically doable in terms of cost and time?

I also want to understand how Indemnity Insurance works for HMO if I can’t lift the covenant.

1. Can the insurance pay multiple times? What does it cover?

For example, after I have the insurance and if someone challenges me for having an HMO, what does the insurance pay for? And to who?

Do I have to stop the HMO from then forever? And I cannot let out rooms any more for that house? Will it affect my credit score or leave me with a criminal record?

2. Under what circumstances can the insurance be invalidated? For example, telling the local authority about the HMO?

I’m sorry for the dummy questions above.

Appreciate your information very much in advance!

Steve

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