Check the deeds before you build: Permission counts for little if a covenant is breached

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The Independent Online
A HOMEOWNER has failed to get a neighbour's house demolished even though it is built on land that was only to be used as a garden.

Instead he has been awarded pounds 6,000 compensation - a far cry from the pounds 390,000 he originally claimed if the house was allowed to remain.

The case highlights the price you may have to pay when you breach a covenant, a restrictive condition in the title deeds of your home.

It is also a salutary lesson for all homeowners to remember that the granting of planning permission to build does not necessarily mean you have complied with the conditions in the title deeds of your property.

In 1990 a house, a separate garage with a snooker room and a bedroom above were built on a piece of land in Solihull, West Midlands.

The owner of the land, a building company, had planning permission but the building was in breach of a restrictive covenant in the deeds.

The covenant, which was in a document dated January 1950, said that the land was only to be used as a garden. Three neighbouring properties could enforce the covenant against the company.

The two nearest neighbours agreed to release the covenant so that the company could build. The company paid pounds 12,500 to the immediate neighbour and pounds 10,000 to the next nearest one to get the waiver.

The company did not get a release from the third owner, Dr C. He started court proceedings to get the house pulled down.

Dr C argued that the building was a violation of the covenant and his property had suffered as a result.

If the covenant was not enforced by the court and the house remained, then Dr C wanted compensation of pounds 390,000. He claimed this amount represented 100 per cent of the profit that the company had made from the transaction.

The company argued that the covenant should be discharged or modified retrospectively to allow the building. The company said that the house had no effect whatsoever upon Dr C's house because of the two intervening properties. There had also been many changes in the area since 1950, which made the restriction obsolete.

The court decided that the covenant was not obsolete. Despite the existence of the two intervening houses, Dr C's land still enjoyed some practical benefits from the covenant - although not sufficient to justify demolishing the new house.

The covenant would be modified to let the building remain. Dr C was to get pounds 6,000 compensation.

Roger Squire, of Squire and Co, solicitors, acts for the company. He said: 'If you knew what the area was like in 1950 and you know what it was like now, it was the right decision. The relationship to the piece of land was changed quite dramatically when the two houses in between were built in the 1960s.'

Most properties have restrictive covenants - for example, not to extend without consent, or not to carry on a business. Before you do any building work you should always check your deeds.

If there is a covenant, see if there is anyone still entitled to enforce it. It is not widely realised that you can often get covenants waived on payment of a relatively small amount of money.

John Samson, a property partner with Nabarro Nathanson, a firm of solicitors, says: 'The good news illustrated by this case is that if you can get a covenant modified, the price you have to pay is not prohibitive. You do not have to pay the enhanced value to your property (which may be substantial if you have built a house or put on an extension). You are only liable for the amount by which the other person has genuinely suffered any damage because he no longer has the benefit of the covenant'.

You may decide of course to turn a blind eye to the contents of your deeds and build regardless.

But do not be lulled into a false sense of security. Just because you get planning permission and build in accordance with it, it does not mean that you have complied with the restrictions in your title deeds.

(Photograph omitted)

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