Implied restrictive covenant breach on Ex LA student let in Norwich

by Readers Question

10:22 AM, 28th March 2016
About 3 years ago

Implied restrictive covenant breach on Ex LA student let in Norwich

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Implied restrictive covenant breach on Ex LA student let in Norwich

I am wondering if anyone else has come across this problem with Ex Council Houses.restrictions

I am purchasing additional ex Local Authority houses around the University in Norwich as going concerns which are let to students on single AST’s. My Conveyancer picked up on a restrictive covenant within the deeds and queried this through a law firm to the Norwich City Council.

The response received was:

The city council are of the view that occupation of ex-local authority properties such as these as student accommodation would in fact constitute a breach of the covenant which states:

a) That the owner shall not use the dwelling to carry on trade/business, and
b) That the owner shall use the property as a single private dwelling house only.

This decision follows a wider consideration of the question of student accommodation comprised in ex-council properties on the whole.

I have referred this back to the council as there is no trade/business carried on from the dwelling (it is let through a company not linked to the address) and that it is a group of 5 friends sharing a property on a single AST.

I am further aware that there are multiple student let purchases completing prior to 01 April 16 in ex Local Authority houses which do not appear to be getting the same response.

Has anyone on here had this issue previously with Norwich City Council or any other council, and if so, what was the outcome for you.

I am concerned about the ‘wider consideration of the question of student accommodation comprised in ex-council properties on the whole’ as there must be in excess of 1,000 XLA’s being used as student accommodation around the University and the potential knock on effect this could have.

This also has potential issues for further purchases or remortgages as most lenders will be wary of a declared implied breach.

Wayne



Comments

Wayne Hoban

9:54 AM, 2nd April 2016
About 3 years ago

Reply to the comment left by "Adrian Bond" at "02/04/2016 - 08:59":

Hi Adrian,

Thanks for the post. Your situation appears identical to mine.

As you are a Ltd Company, could I ask which lender you are using? Kent, Fleet, Aldermore, Precise?

Also, which solicitor were you using and what was the response from the council when the covenant was queried? My conveyancer also queried it to NCC and they have replied saying that a Student Let on 1 AST would be a breach of the restrictive covenant! Do you have a copy of the reply from NCC that you would be happy to forward?

Many thanks

Wayne

ElmyPMS

13:31 PM, 2nd April 2016
About 3 years ago

Probably too late now ..
In the first instance .. it is a gamble
I'd have purchased, rented out and hoped the students kept the noise down not warranting any complaints to encourage NCC intervention.
But now you've involved NCC (asking them the question) ...
Are they going to be monitoring the property?
I'd doubt unless there is complaint about the students that NCC will take any action .. there are plenty of similar in that area around UEA
What have they to gain by enforcement?
In todays economic climate I think if they can avoid additional work and associated expenditure they will.
However as a first let it may be better to let to a family (if you can find one)
And subsequently return to the student market for the 09/2017 student year commencement.

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