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Joshua
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 26069
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I am close to exchange on a house purchase in the New Forest

Resolved Question:

I am close to exchange on a house purchase in the New Forest (national park) that is in a private road which forms part of a three-road private estate. There is no residents' association for the road or estate. The house is detached and has various restrictive covenants that are common to all dwellings on the estate, including No Trade or manufacture to be carried on at the dwelling. The covenant dates from 1903.

I am planning to run small-scale cookery classes from the kitchen of the house - 4 students per class up to three days per week. The house has off-the-road parking for 6 cars which should be plenty for the cookery classes, so I don't anticipate student parking being a nuisance to neighbours.

I understand it's possible to take out indemnity insurance to cover loss of earnings (I assume) if a neighbour decides to enforce the covenant. And that to get this insurance it's advisable not to inform neighbours in advance of the intention to run the cookery classes. Is that correct?

I also believe I should apply for a Certificate of Lawful Proposed Development from the local authority (and the New Forest National Parks authority I guess) with a view to them confirming that running cookery classes is lawful and doesn't require planning permission. Is it necessary to do this and if yes, would I be obliged to mention the restrictive covenant? And if so might that affect their ability to decide that the activity is lawful?

I understand local authority regulations for in-home cookery classes are less rigorous than baking food from home for sale.

I am trying to work out whether or not to proceed with the purchase of the house based on the level of risk that I would be prevented from running cookery classes - and possibly baking food for sale in the longer term. Your advice very gratefully received
Submitted: 3 years ago.
Category: Property Law
Expert:  Joshua replied 3 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

do you happen to have the exact wording of the preamble to the restrictive covenant. It would usually say something along the lines of "the transfer re-covenants with the transfer or to observe and perform the following covenants" or something of that nature

Joshua :

additionally, do you have the wording of the right of way that the property presumably benefits from over the road you mention?

Customer:

Hi. Under the Schedule of restrictive covenants ' The Purchaser shall for himself his heirs, executors, administrators and assigns with intent so as to bind the said premises hereinbefore granted and the successive owners thereof from time to time and their respective estates but not so as to bind personally any such owner or his estate in respect of anything done or omitted after he shall have disposed of the fee simple of the same premises doth hereby covenant with the said Alice Spicer , her heirs and assigns and the Vendor, his heirs and assigns, owner or owners for the time being of the remainder of the said estate or any part thereof that the purchaser and his heirs and assigns will at all times hereafter perform and observe the stipulations set forth in the said First Schedule hereto so far as the same relate to or affect the said piece or parcel of land hereinbefore granted.

Customer:

Re right of way. The Land has the benefit of the following rights ... " Together with the right of way for the Purchaser (heirs etc) in common with others having or acquiring the like right at all times and for all purposes over the roads shown on the said plan AND TOGETHER with the free passage and running of water, soil, gas and electricity in upon or uner the adjoining property for the purpose of of connecting with laying, repairing, maintaining and renewing the said sewers, drains, pipes and cables the person or persons so entering making good all damage occasioned by such entering EXCEPT AND RESERVED unto the vendor and his successors in title to the Vendor's adjoining property etc. enough?

Joshua :

Thank you. on the basis of the above wording, the covenants appearing thereunder would not appear to be enforceable any longer as a result of the decision in the Crest Nicholson case. In this case the court decided that in order for a covenant to be enforceable by virtue of something known as statutory annexation - this is the device whereby a restrictive covenant can be in force by successive owners I virtue of the covenant and annexing or attaching itself to the land by virtue of provisions in statute - the covenant must identify the land which the covenant is to benefit. Because the wording of the covenant does not refer to which land benefits from the covenant it therefore fails the test laid down in this case and does not benefit from statutory annexation and therefore would appear to be unenforceable

Joshua :

it is possible to obtain indemnity insurance as you suggest however standard issue policies would not include provision for loss of commercial income. You would need to ask your solicitor to obtain a bespoke quote from an indemnity provider if you wish to include this aspect of cover

Joshua :

regarding the right-of-way, this seems satisfactory. By modern standards, the right-of-way ideally would include reference to with or without motor vehicles however it is a product of its time and the reference to all purposes in my view satisfactory to establish a right to drive over the road providing the road is suitable for motor vehicles.

Customer:

Thanks. I don't quite understand the reason fro the lack of enforceability (tho' very pleased to hear it!). Can you simplify your explanation?

Joshua :

ideally you will establish that there is some basis either informal or otherwise for maintaining the road. There is no specific requirement for a formal arrangement to be in place however satisfaction that there is some mechanism for maintenance to prevent the road from falling into disrepair should be investigated by your solicitor. this is a requirement of the CML handbook which sets out the requirements of mortgage lenders and whether or not you are obtaining a mortgage yourself, you should bear in mind that purchases generally require mortgages and therefore any buyer in the future may require this to be established. you may wish to raise an enquiry with your solicitor in this respect

Customer:

If the restriction is unenforceable I assume indemnity insurance isn't useful or necessary? What would such insurance cover if not loss of income?

Joshua :

with regards XXXXX XXXXX restrictive covenant, because the law has developed through case law, they are unfortunately very complicated. I can certainly try to simplify the explanation. essentially, the courts decided that in order for this type of covenant to be enforceable, the Cabinet had to specifically identify which land benefited from the covenant - for example, for the benefit of the land edged green on the plan, the transferee agrees to abide by the following covenants. because this document does not identify the land that is to benefit from the covenants, it fails the test laid down by the court and therefore can be considered unenforceable unless the courts reverse the decision in the future there there is no indication that this is likely as things stand

Customer:

Ok, capiche

Customer:

Re road . There is an informal arrangement for road repairs, but thanks for your point and I will check with our solicitor

Joshua :

if you are content to rely on the court's decision above then you may consider dispensing with the requirement for insurance. Obviously, the court's decision can potentially be overturned however this was a Court of Appeal decision handed down in 2004 and has become relatively established case law and therefore the prospect of it being overturned is probably unlikely that one can never say for sure.

Customer:

What would be the purpose of indeminity insurance?

Joshua :

if you would feel more comfortable with indemnity insurance in any event, you may wish to ask your solicitor to obtain a bespoke quotation but as you say, on the above basis, indemnity insurance is not strictly necessary. indemnity insurance would cover a situation where a third party successfully enforces a covenant against you. The insurance company would cover legal costs in relation to defending the claim and any event they were successful, any damages payable as a consequence

Joshua :

with regards XXXXX XXXXX permission, best support you say, the cooking classes would be ancillary used to your main use of the property as residential. On this basis, no planning permission should be required however if it is your intention to turn over part of the property on a full-time basis to the enterprise then planning permission may be required for change of use in respect of that part of the property

Customer:

OK.

Joshua :

if you are preparing food, you may need to submit an application to the local authority's food hygiene Department and you may wish to contact them to discuss this point if you are not already familiar with their regulations - this is ever so slightly outside of my speciality. if you do, it should not prove to onerous as a believer does a simple notification to the local authority but she will obviously need to be familiar with food handling regulations as they have the power to inspect

Customer:

the cookery classes would be ancillary to the main use of the house, but local authority advice is still to submit an application for Certificate of Lawful Proposed Development. In your view is this worthwhile or completely unnecessary?

Joshua :

They would! Providing the principle use of the house is residential and this is an ancillary use no change of use application should be required. If you find that this were to become the main use for the property then the position would be different.

Customer:

Yes I will liaise with the local food hygiene dept . I've also been advised I should register the business with the local authority although it's not obligatory.

Joshua :

Re change of use there is a briefing paper that confirms the above and the advice of the local authority as being incorrect.

Joshua :

Re registering the business frankly the less the LA have to do with it the better in my view but you can if you wish.

Joshua :

I hope you will forgive me but I think I will need to consdier retiring for the evening. Is there anything else I can help you with before I do?

Customer:

Last point. I suppose if I had cookery class company signage on the gate this would imply the activity isn't ancillary and therefore best avoided?

Joshua :

The test for use is the amount of space in the property given over to the ancillary use. If less than 50% then the use can normally be considered ancillary. If it is more than 50% then the use would normally be considered primary and a change of use application required - which incidentally would likely be refused in a residential area in the New Forest so generally it is better to keep the use ancillary. In addition on a practical note if the area is reasonably well to do, it may be worth keeping your business signage relatively low key as it can give rise to interfering reports to the LA from neighbour who don't like the signage.

Joshua :

Does the above answer all your questions or is there anything I can clarify or help you with any further?

Customer:

That's all extremely helpful. Many thanks Joshua. Good night

Joshua :

A great pleasure. I hope all goes well with your purchase. It is a lovely area - I am quite jealous!

Joshua :

And to you.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though.

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