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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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We are in the process of purchasing a cottage on the north

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We are in the process of purchasing a cottage on the north Norfolk coast which is subject to a restrictive covenant "Not to use permit or suffer to be used the Property or any building thereon for any purpose other than as a single private dwellinghouse". This covenant was imposed in a transfer dated 18th July 2003 to our vendor. For the last 7 years, the vendor has been letting the cottage as a holiday let, and this has not prompted the beneficiary of the covenant to complain or instigate proceedings in respect of any breach. We also intend to use this as both our (2nd) home and as a holiday let when we are not in residence. I am aware of the ruling in Caradon District Council v Patton and Bussell, but do not think the issue regarding housing stock applies in this case. The part that concerns me is the concept of a degree of permanence and that the property should be used as a home rather than a holiday. Can I have your thoughts.
Submitted: 1 year ago.
Category: Law
Expert:  Joshua replied 1 year ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience.Could you tell me who is the beneficiary of the covenant and whether they own any land adjoining the property or nearby?Could you also give me the preamble to the restrictive covenant(s) which may read along the lines of "for the beiefit of xxx land the purchaser agrees to observe the following covenants" or words to this effect. If you could give me the exact wording?
Customer: replied 1 year ago.

Hi Joshua

Thanks for your prompt response.

1. I'm still awaiting my solicitor to send me a plan showing the exact extent of the retained land, as the plan he has sent attached to the 2003 Transfer which includes this covenant only shows the property we're purchasing and not the land benefitting from the covenant. I do know the retained land will be at least one property that immediately abuts the property (the property was effectively sold out of this land) but I'm not sure if subsequent transfers of the retained land will have sub-divided this further and thus increase the number of beneficiaries of the covenant. I'm not sure if our vendor's vendor still owns the retained land, but I assume the benefit of the covenant will pass to his successors in title in any event (and from the wording below it seems this is clearly the case).

2. The wording of the covenant is as follows: -

For the benefit and protection of the Retained Land and each and every part thereof and (so far as may be) so as to bind the Property into whosoever hands the same may come the Transferee hereby covenants with the Transferor and his successors in title that the Transferee and the persons deriving title under the Transferee will at all times hereafter observe and perform the following restrictions and stipulations: -

Not to use permit or suffer to be used the Property or any building thereon for any purpose other than as a single private residence.

There is another covenant but this does not relate to this issue.

My solicitor is saying it's not a concern but he hadn't heard of Caradon D C v Paton and Bussell, so I'm a little concerned (the service we've received so far has been a little remiss at best). I'm not sure if my solicitor has raised any enquiries to see whether the vendor got the express permission of the covenants beneficiary and he hasn't even suggested restrictive covenant indemnity insurance, so I'm a little concerned. We are due to exchange next week, but need to get this issue resolved before we can proceed any further.

Any help you can give me would be greatly received especially in terms of anything we can do to mitigate any litigation for breach. If you do think this is a problem, would you be able to let me know what remedies in law the covenants beneficiary has, and how we can mitigate for those. We need the income from this house to pay the mortgage so if there was the possibility of an injunction being made against us stopping us using this as a holiday let, we would be in serious trouble.

If you need anything else, please don't hesitate to ask.

Thank you so much.

Expert:  Joshua replied 1 year ago.
Thanks. The wording of the covenant would appear to satisify the tests laid down in the Crest Nocholson decision and would appear to benefit from statutory annexaion - rules on covenants are fiendishly complex due to lack of legislation. The above is a legal jargon way of saying that I consider the covenant likely to be enforceable which is a shame but there it is. Given that the covenant is likely to be enforceable there is the question of whether holiday lets is likely to breach the covenant. Caselaw on the matter suggest that it likely would. There is the case of C & G Homes Ltd v Secretary of State for Health which held that covenants requiring the use of a dwelling as a private dwelling precluded use for housing mental patients but rather that the property should be used as a private dwelling. Barton v Reed [1932] 1 Ch 362, Rolls v Miller (1884) 27 Ch D and Tompkins v Rogers [1921] 2KB 94 all tend to support the position to a greater or lesser extent that holiday letting is use not as a private dwelling. There are a couple of mitigating cases. One is the case you referred to but that is of limited use because it only states that regard must be given to the intention of the covenant. Here is is likely to allow the adjoining owner some control of the use of the property so is unlikely to give you any basis to defend a claim. The only case that does give you some reassurance is Florent v Horez (1984) 48 P & CR 166 which provides that a "spare time" activity does not amount to business unless there is direct commercial involvement or the use is more than ancillary or subordinate to the residential use and that this will be a question of fact and degree. However this judgement specifically related to a covenant not to carry on a business where there is no covenant not to use the property only as a private dwelling. So in summary the case law would generally follow a position of supporting an attempt by the neighbour to enforce the covenant against holiday letting. There are one or two caveats it is true but they are thin at best. In my view, you should purchase the property on the basis that you will not be able to use the property for holiday letting without the consent of the owner and if you are able to do so in practice, this is a bonus. In my view it would be very dangerous to buy the property on the basis of a reliance on the right to holiday letting because that right is at the very best fragile and in my view would be subject to a potentially successful challenge if it went to court. I hope the above is of assistance? If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today or just reply back to let me know if the above is helpful. Your feedback is important to me. If there is anything else I can help with please reply back to me I'd be very grateful
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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