Planning Clause

[Mike25]

My granddad sold his house 40 years ago with a field at the back with a clause stating no one could built on the field. He is 90 now and have been contacted by the people who bought the house asking them to remove the clause. If the site got planning it would be worth 1 million plus! Is there any other way the people could remove the clause without my grandad say so?

[FredPuli43]

See answers to your other. thread on this topic. Building land fetches upwards of £1 million an acre. We don't attempt to stop it, we just take a share of the profit if it happens.

[johnny37]

my br/sis-in-law bought a house with an obsolete underground reservoir next door. There was a covenant on the deeds that the reservoir could not be developed. After a bit of negotiation the water board accepted an offer to remove the covenant for £20000, enabling my inlaws them to build a very nice house and sell the original house. I would get a knowledgable solicitor to negotiate for your grandad, with a starting figure of half a million.

[Peter Pedant]

Agree your father says yes and takes a cut.
the only thing is what is a fair cut

case law on this - but I cant remember the case....

[FredPuli43]

The Water Board were in a strong position. They were selling the land. The price, including removal of the covenant, would have been the same as if they hadn't removed it, but it was better, to avoid any doubt, that they agreed to remove it.

[tamborine]

The clause cannot be removed without your g'dad or heirs agreement; its usually removed on a financial settlement, which is the point of the clause.

[FredPuli43]

True, tamborine, but there's not much point if the clause is unenforceable or can be overridden with ease and so ignored. But a developer might well offer a sum just to avoid any potential delay, in any event.

[johnny37]

Fred, the £20000 paid to the water company enabled my inlaws built a £1m house and sell the house they were living in for upwards of half a million. Not sure how much was paid for the original plot (the reservoir) which was in a prime residential area. The company were obviously aware of this and wanted a cut. £20k looks cheap. In Mikes case the major factor will be is planning likely to be granted. The new owners think clearly yes and hope to get the covenant removed cheaply. If Mike (his grandad) digs his heels it will test how far the owners are prepared to go. They need professional help

[FredPuli43]

Johnny, did not the water board own the land, to which the covenant applied, when they agreed to remove the covenant?

[tamborine]

If discovered the clause is over-ridden the original vendor/estate can sue for recompense.

Our Ag-land (brown land) has been designated to green land by Gov & DCammy is thwarting council objection to development ;)

[FredPuli43]

The original vendors can sue for recompense can they? And that applies in perpetuity does it, so the ninth generation from the vendor, inheriting by descent, or any buyer of it, though they be the fiftieth, can sue? Well that will make for an interesting case !

[FredPuli43]

The real problem, as you are pointing up, tambo, is that planners and governments can do what they like, quite regardless of whether the covenant is enforceable by injunction or not.

[johnny37]

Fred, my inlaws bought the reservoir to extend their garden. The plot was about 50m square. The covenant was removed later. Cant see how a covenant can be removed without the buyer knowing (it would be fraudulent), unless it is one of the cases where the land was once owned by the church who come calling for church repair costs years later. It is possible to insure against that event.

[themas]

Without knowing the precise wording of the covenant it is impossible to be 100% certain about the outcome. However, in many cases clauses such as you describe are what is called restrictive covenants, & are normally made in favour of someone who retains an interest in the locality - such as to protect the view from the vendor's neighbouring land or property. Such covenants can be overturned if the person in whose favour they were made is no longer in a position to benefit from them. Often, potential liability under the covenant can be insured for a small premium.

Your case seems to be different, as your granddad presumably moved away from the immediate neighbourhood. If so, his solicitor should have worded the covenant in such a way as to protect his interests so far as possible. The usual way of trying to ensure the vendor retains an interest in any development value is to spell this out in the covenant, but this is normally done for a limited period of years.

As yours was placed 40 years ago, it seems much more likely no time limit was set. It so happens that the purchasers have traced your granddad (perhaps they were advised they must attempt to do so), so I would be surprised if they could get the covenant removed without his agreement. If he had not been traceable (or had died, & they couldn't trace whoever inherited), I suspect they could have gone ahead without paying anything on the basis of indemnity insurance.

Legal advice, based on the exact wording of the clause, is vital. I would think that an absolute minimum of 25% of the land value should be obtained - possibly quite a bit more.