Prohibitive Covenant restricts occupancy

by Readers Question

14:27 PM, 12th August 2013
About 6 years ago

Prohibitive Covenant restricts occupancy

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Prohibitive Covenant restricts occupancy

OK This is a complex one for all you experts out there. I rented a property on an AST contract. The property ‘cottage’ is a relatively large property by UK standards. Separate structure, fully self contained, kitchen, reception room(s) bed(s) bath(s). A superior property with a substantial rent and substantial deposit prepaid! Prohibitive Covenant restricts occupancy

Let me start by saying I originate from outside of the EU area and am not familiar with UK housing law or relevant LA taxes or restrictions.

Given that…. I entered into the contract with the assumption what was being told to me was true.

The first inkling I had that a problem existed was when I tried to secure phone service to property, only to be told the property did not exist. At every turn I encountered the same problem. I needed to communicate with local council on the issue. That is when they checked their records and informed me the property I was renting was not properly registered and that it had to be valued and banded?? “Not your problem” they said… “you have done nothing wrong… he would have been caught at some point” Confused, I am trying to ascertain what is happening… all the while having to have my bank account, any official correspondence sent to a ‘care of’ address… being that mine did not exist in any database. So many hassles and instances too numerous to recount… suffice to say a huge pain in the a**

The local council advised me to say nothing to landlord/owner and it would get sorted… Not realizing “getting sorted” was creating a tax liability that up until the point of valuation did not exist.

So three months into the tenancy I receive a notice of NEW valuation and a council tax bill? I am informed that all separate self contained residential dwellings are subject to council tax! Aaah but I tell them I was informed mine was part of the larger property and per the landlord fell under the larger umbrella of the property ie: he paid it as it formed part of his property.

Not so they say… rules changed with council tax implementation in the 90’s

The council at this point are contesting the A band rating (rightly so I might add) given the considerable proportions of the property.

I speak with valuation office who inform me the property is rated A because it has a restrictive covenant a section 52 that lowers the value. They inform me the property should have being assessed Council Tax for the past twenty years but it somehow fell through the cracks… I asked what the restrictive covenant was and I was told to get the property file from the planning department.

Well that was sure an eye opener.. too many twists and turns to mention in this already lengthy post.

Bottom line there is a restrictive covenant that this property was allowed to be converted under the strict accordance with the section 52 provision,  legal document signed by current owner/landlord. This restrictive covenant still in effect restricts the use of the building to ancillary use and family only occupancy. While for all intents and purpose it a self contained dwelling it is not allowed to be used as such outside of expressed use limitations… (my best explanation without quoting official legal text)

I am not the first ‘private” tenants to be in here, two prior that I know of but apparently they must not have been concerned abut having their services in their own name and registered to the individual property. I have no idea how this went undocumented for so long. It is my understanding that a B&B business was being ran from the overall property in the past!! Also not documented!

The final straw was when the owner presented me an electricity bill to pay on the property! It was listed as a business bill. It encompassed a time frame that I was not yet a tenant. I refused saying I needed more accurate accounting.
During the conversation (that became increasingly hostile on his part) I mentioned my unhappiness that I had been presented with a council tax bill and that was also not part of our agreement and I wished a rent credit for the newly formed liability. Unknown to me the local council and valuation office had failed to notify him of the the valuation and banding. I thought him being the owner (reasonable assumption on my part??) they would have informed him. But no…. I was the bearer of the bad news and now I am paying the price. He insulted me in front of my children calling me names such as “dishonest” and “underhanded” the hypocrisy defies belief!!

The harassment was upped considerably at this point. Actions which definitely fall within the scope of harassment.
These are wealthy people with assumed good standing in the community. The behaviour being displayed towards my family is outrageous.

I am assuming there is some form of illegality with regard to my contract. I am most concerned about my deposit. It is in a scheme but I am thinking the contract is null and void anyway and not sure where this leaves me and my family.
To say our ‘peaceful enjoyment’ of the property has been interrupted is an understatement to say the least.

What I find totally unacceptable is he is not liable for back taxes because the Valuation Agency only became aware of it upon my tenancy. The fact that he expressly ignored a legal requirement and profited from it means nothing. It is only valued an A band rating because of the restrictive covenant but the Valuation Office do not police the covenant, they only factor it in valuation, hence he has benefited from his dishonesty. This property is operated for commercial gain… if in fact he is allowed to flaunt the occupancy restriction surely the property should be valued at its income producing worth?

Many things do not make sense to me. The government is making severe cuts to the vulnerable in this country while an obvious abuse of the system and loss of much needed local revenue goes unchecked.

I in the meantime am in the middle of this mess.

It is an absolute nightmare.

What protections do my family have?


Mary Kane


mike wilson

12:42 PM, 14th August 2013
About 6 years ago

Mary, I totally agree with what you say. I am afraid when these complex issues arise you will find many 'professionals' do not understand the basic principles. Not even in the local council. I will freely admit that I may have missed something. The issues are complex and they do involve you. But US law is based upon old UK law - the US were after all a colony for many years and the initial laws were written by good old English lawyers. So US principles are similar. And the principle of paying property tax - for the period you are in occupation - is also clear. But there is no back claim on you. The lease will be silent on the council tax since it was not being paid. The law basically says the tax is paid by the occupant unless there is a contractual change in the lease.

The law here will treat you as the innocent party. But for all these reasons you need to understand what is going on.

My recommendation? Speak to the planners. Speak to citizens advice/a lawyer. Get an understanding of what is going on. Then tell the landlord that you intend to seek alternative accommodation and that when you have found something you will leave - and only then. Then if he does not like it you will take him to the small claims court to get compensation for the harassment, inconvenience etc. That will shut him up.

Mark Alexander

12:53 PM, 14th August 2013
About 6 years ago

Reply to the comment left by "Lise Willcox" at "14/08/2013 - 12:42":

If you Google "Landlords and Chickens" guess which website come us? LOL

Sorry to be picky but not all AST's are for 6 months.

mike wilson

12:58 PM, 14th August 2013
About 6 years ago

Ok one more try.

Knowing that the Queen goes to Balmoral in August, I offer a AST to Abramovich for 6 months in Buck Palace. He moves in.

Is the AST valid?

No. I did not own the house. The AST is illegal. Queeny can repossess or can she as there are now squatters?

A contract can only be legal if there are no fundamental illegalities.

A landlord who offers an AST on a property governed by HMO law who does not have an HMO licence - is the AST legal?

Or is a lawyer going to tell me something different?


14:16 PM, 14th August 2013
About 6 years ago

Mike...Thank you! getting to the 'nitty gritty' Yes any individual or groups can enter into a contract but if the service/subject offered (the rental of a property precluded by law from being such) in itself is illegal then how can the contract be valid? If a significant factor regarding the terms of the contract were misrepresented or willfully omitted (AKA lies) how has that no impact on the contract? It is central to the contract and all the ensuing issues. The owner lied...a fact that is supported by all the evidence and legal documentation. If I had been informed "hey lady keep this on the hush hush...I'm not allowed to rent this dwelling it is the benefit to you is you or I don't have to pay council tax and I don't have to declare it as income...what do you say lady" At that point I would have known the true legal status of the property..I would have been correctly informed instead of being misled. I would have been able to exercise an INFORMED decision.

What exactly would the point of a restrictive covenant be if it were not legally enforceable?
I am getting this vision of a kinda 'have your cake and eat it too' mentality.

Previous post reply.....How is it my fault that I did not go to the owner 'to work it out'?
Exactly what was I going to 'work out' that would not have involved deceit or collusion on my part once I became aware of the failure to disclose?

I am sorry he was/is a crook. My bringing to his attention that I was aware of that was only going to be helpful if I was willing to support him in his continued behavior/deceit which I was not!

I repeat those that seek to place blame on me, the innocent party, do a disservice to 'legitimate' Landlords.
Mike...Do you feel like you are banging your head on a wall here?

Mary Latham

14:19 PM, 14th August 2013
About 6 years ago

Reply to the comment left by "Mary " at "14/08/2013 - 11:43":

Mary my point is that you, as the tenant, have the legal right to remain in the property until you decide to leave or the landlord obtains a Court Order to remove you. Regardless of the fact that the landlord has acted illegally your rights remain. Even where a lender repossesses a property from the landlord, the lender cannot simply throw the tenant out. On the other hand if you wanted to break the contract the landlord would not have a leg to stand on.

Mike a landlord who should have an HMO licence and has not can be prosecuted by the local authority but they would not force him to remove the tenants illegally, they would expect him to go through the Possession process or licence the property and the AST would be valid during this process. Protection from Eviction overrides everything except health and safety.

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15:29 PM, 14th August 2013
About 6 years ago

I am a bit confused as to the real question here.

Mary Kane is complaining that she has to pay council tax and at a higher rate than she thought. This has nothing to do with planning.

She is liable to council tax at the rate set, no argument. Why does she think not? She is clearly annoyed that by opening a can of worms she is the one who is worse off.

If the council had not informed the owner of the liability then that is not his fault and it is she who seems to be trying to avoid the tax not the landlord.

If he is contravening his planning consent that is another issue.

mike wilson

16:10 PM, 14th August 2013
About 6 years ago

Mary, as I said in a previous post it is a complex issue. Unfortunately some people are not able to see the wood for the trees around them.

It is unfortunate that you are in this position but any sensible local authority will act reasonably. They are required to do so as a basic principle of law. That is why I have stated it is important to understand what the authorities will decide to do.

In most cases they are unlikely to take draconian steps. Whatever they decide is not your problem as they will be obliged to allow you to stay until you can find alternative suitable accommodation. They may even allow a 'retrospective planning application' to make the position of the landlord legal. (This is what has happened in the farming covenant case.) But clearly the position you have been put in by the landlord is unacceptable and not your fault. And these are factors that the local council will take into account.

What I don't know is what the legal position is for you currently and that is why I suggested citizens advice or a lawyer.

Until such time as the Council decides what to do, and that could take months, I think your lease does not exist in law for the reasons I gave before. In that set of circumstances you need legal advice.

There are issues also on whether the council tax banding is appropriate. The valuer may be wrong. I don't know what the rules are on separate properties which are not split in the title deeds. Again not an issue for you except in the council tax charge. You could query the position with the council as if the property cannot be legally occupied you could argue you are not in occupation and therefore not subject to the council tax charge.

I am not a lawyer so you do need to get advice.


16:28 PM, 14th August 2013
About 6 years ago

Reply to the comment left by "mike wilson" at "14/08/2013 - 16:10":

I have looked this up and as the property is self-contained it is subject to separate council tax.

Mary's only valid argument is that she was told she was not liable as the tax was within the main property (which it isn't) and then maybe she can renegotiate her rent. It would depend on the terms of her tenancy agreement.

What happened before she moved in is irrelevant to her own situation and trying to drop the landlord in it hardly seems likely to promote an amicable outcome.

If he is contravening his planning consent then she is too.

mike wilson

16:37 PM, 14th August 2013
About 6 years ago

Puzzler - neither of us know what the restrictive covenant actually is. The post implies it can only be used by 'family'. I am not sure that implies a separate habitable building under ct rules. Many buildings on a farm may be for purposes involved in the business. By the sound of it there are no separate supplies for electricity and phone ...

Mary's very valid argument is that she was not told of the restriction. Had she known she would not have taken the property.

Just as you would not buy a stolen car if you were told it was stolen. At least I presume you wouldn't. The problem for you, innocent or not, is that the car would be taken from you. You become a victim of crime just as Mary is. I guess you would not feel to happy about people blaming you ...


17:15 PM, 14th August 2013
About 6 years ago

Let me clarify....God forbid there be confusion...I have already been deemed "arrogant" for classifying this as a complex issue.

I/ My question was to illegality of the contract. Given the prohibitive restriction on the property. A legal covenant exists that expressly prohibits it being used as a separate private dwelling. I entered into a contract unaware of the legal status and occupancy restrictions regarding the property. The property was misrepresented to me.

2/ I am not contesting the council tax. If granny or other non excluded occupants were residing then absolutely the A band rating would be in order. And in fact should have been paid for the past 20 years... To be clear... regardless of my occupancy or not there was still a liability that should have been declared and paid.
I wholeheartedly support the council in their assertion that an A band rating is too low if this property is being rented as a separate private dwelling for commercial gain. Do you think he should have his cake and eat it too? There were valid reasons for the restrictive covenant...Reasons why they would not consent to its removal..

3/ When I contracted for the property I was informed the rental fee was all inclusive of any and ALL taxes. They expressly stated no council tax! (didn't know what that was at the time!) At that time there was no council tax bill on the property. No bill existed.. in fact no valuation or banding existed. So I would assume that I am right in maintaining that on the exact date and time I entered into the contract our agreement of all inclusive was factual. They did not state' there is no council tax because we are failing to declare the property due to the fact there is a restrictive covenant that legally prohibits us from renting to you'..Do you get my drift.. Not due to error on my part but a failure on the part of the owner to properly declare his property. Not my omission but his. I did not misrepresent.. he did. So.. regardless, all I feel obligated to pay is whatever the current taxes are on the property, as they see fit to value it, and I will reimburse the owner up to our agreed initial inclusive sum. I am sure HMRC and other taxes operate they same way as the IRS in the U.S...even in a situation where you can claim ignorance (not applicable in this case) you are still liable for all taxes for the relevant period.

4/ Aaah and the back to me "opening a can of worms" The landlord was knowingly not declaring his property for taxation purposes. I take great offense at the continued assertion by some on this site that I am in some way partially responsible for his failings. I of course am privy to more in depth information but suffice to say he was by no means ignorant to the fact he was concealing his tax obligation.

5/ I would have to say this is a mess of his own making. Fueled by greed and dishonesty. I have been harmed in my less than 'peaceful' enjoyment of the property. It is outrageous that I paid thousands of pounds in advance only to have this mess dumped in my lap.

6/ This Landlord is now engaging in retaliatory 'warfare' to the point he interrupted my utilities. Any faint remaining credibility he had went out the window there. Yes sorry to say he considers himself above the law. So please no more poor Landlord...I have young children that could not eat a hot meal...Yes I do see how upset the owner is for being 'outed' Not rightly so...Wrongly so...he had a good run ...he got away with years of council tax liability...What part of "he" is taking from the community pot don't you get!!

7/ Yes I am obviously seeking legal representation at this point...Having to pay to protect my family from someone who is breaking the law! Lovely!! You have all the tenant rights in the world...Really!... if you have a rogue Landlord it is a nightmare.

8/ Is there a golden rule all Landlords stick together regardless?. "He might be a lying, rule breaking, tax dodger but he is one of us...a Landlord!"....I'm all for brotherhood...sisterhood but above all align yourself with what is right.

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