House sale problem.
Discussion
Hi Guys,
Sorry about the length of this, I’ll try to keep it as brief as possible. I live in an end house of a block of 4. The development was built 13-14 years ago by a large, national building company, there are approximately 30 houses/apartments and the obligatory block of social housing flats.
When we moved in in 2006, the builders told us there would be a maintenance charge to be paid annually, for looking after the “communal areas etc. However, none of us have ever been asked for any money and nobody has ever carried out any maintenance of these areas, in fact, we have all maintained our own areas, to keep the development looking nice. This morning, my elderly next door neighbour came around, in tears. He has just had a sale fall through as, apparently, there is a restriction on his property in favour of the maintenance company. When this has been checked, the restriction was placed by the builders and the maintenance company have gone bust several years ago. The land registry say they can’t remove the restriction without the permission of the maintenance company and obviously, there is nobody there to contact to arrange this. I have checked my information with the land registry and, although nothing obvious comes to light, there are a number of restrictive covenants which are not detailed, so I can’t see if there is the same restriction on my property.
Is there anything you can suggest? I would really like to be able to help the old guy, as he was really looking forward to downsizing, as his wife has dementia and his life is currently very hard. Thanks for reading, I would be very grateful for all positive responses.
Sorry about the length of this, I’ll try to keep it as brief as possible. I live in an end house of a block of 4. The development was built 13-14 years ago by a large, national building company, there are approximately 30 houses/apartments and the obligatory block of social housing flats.
When we moved in in 2006, the builders told us there would be a maintenance charge to be paid annually, for looking after the “communal areas etc. However, none of us have ever been asked for any money and nobody has ever carried out any maintenance of these areas, in fact, we have all maintained our own areas, to keep the development looking nice. This morning, my elderly next door neighbour came around, in tears. He has just had a sale fall through as, apparently, there is a restriction on his property in favour of the maintenance company. When this has been checked, the restriction was placed by the builders and the maintenance company have gone bust several years ago. The land registry say they can’t remove the restriction without the permission of the maintenance company and obviously, there is nobody there to contact to arrange this. I have checked my information with the land registry and, although nothing obvious comes to light, there are a number of restrictive covenants which are not detailed, so I can’t see if there is the same restriction on my property.
Is there anything you can suggest? I would really like to be able to help the old guy, as he was really looking forward to downsizing, as his wife has dementia and his life is currently very hard. Thanks for reading, I would be very grateful for all positive responses.
Normally there will be a management company which would own the freehold and the maintenance would be outsourced to a managing agent. If that is the case and the management company which owns the freehold has been wound up the land technically reverts to the crown. I have seen this once but I don't know the solution. I would assume you would all have to claim possessory title after x many years and insure the title.. this would be very difficult and messy.
There is a lot more detail needed and I would suggest it needs sorting for your houses sake as well..
By freehold title I'm implying your property is leasehold and the management company owns the house/flat..
Alternately you own it freehold and there is a covenant to be a part of the management company in the title..
Probably best to see a solicitor..
There is a lot more detail needed and I would suggest it needs sorting for your houses sake as well..
By freehold title I'm implying your property is leasehold and the management company owns the house/flat..
Alternately you own it freehold and there is a covenant to be a part of the management company in the title..
Probably best to see a solicitor..
Edited by Fish on Monday 8th July 17:04
You should be able to get a copy of your title very easily that'll contain covenants. Speak to a local solicitor if you're not sure but you can get it online..
We are having issues with out lease due to high ground rent (zero maintenance). 2 sales fallen through, buyers can't get a mortgage on it )
We are having issues with out lease due to high ground rent (zero maintenance). 2 sales fallen through, buyers can't get a mortgage on it )
Some crossed wires here I think.
The restriction OP’s neighbour refers to will almost certainly be a restriction that says the property can’t be transferred without a certificate to confirm that a deed of covenant has been entered into by the new owner in favour of the management company. It’s the way that the requirement to pay service charges etc is made binding on the new owner and a completely different thing to to a restrictive covenant.
OP, if you’re checking your title, you’d find such a thing in section 2 of the register entries (proprietorship register). You’ll know if you’ve found one because the first word will be “restriction”.
OP’s neighbour has a mess to art out, unfortunately, and needs to go back to his solicitor to try to deal with it.
The restriction OP’s neighbour refers to will almost certainly be a restriction that says the property can’t be transferred without a certificate to confirm that a deed of covenant has been entered into by the new owner in favour of the management company. It’s the way that the requirement to pay service charges etc is made binding on the new owner and a completely different thing to to a restrictive covenant.
OP, if you’re checking your title, you’d find such a thing in section 2 of the register entries (proprietorship register). You’ll know if you’ve found one because the first word will be “restriction”.
OP’s neighbour has a mess to art out, unfortunately, and needs to go back to his solicitor to try to deal with it.
Your neighbour’s conveyancer should make an RX3 application to the Land Registry to cancel the restriction. In box 9 of the RX3 form they should explain that (1) the restriction no longer protects any legitimate third party interest as for some time there has been no functioning management company and no services provided and (2) the restriction is impossible to comply with as the company that needs to give the certificate no longer exists.
Appropriate supporting evidence might be a statutory declaration from your neighbour and perhaps another neighbour confirming point (1). The conveyancer will/should be able to produce these quite easily but will probably charge a slightly increased fee to your neighbour for the overall sale transaction.
Appropriate supporting evidence might be a statutory declaration from your neighbour and perhaps another neighbour confirming point (1). The conveyancer will/should be able to produce these quite easily but will probably charge a slightly increased fee to your neighbour for the overall sale transaction.
We had a similar situation 20+ years ago with a leaseholder that had ceased to trade as a business (appreciate that the details are different in this case).
The point of posting is that we thought we had a problem which was virtually impossible to resolve, but we chipped away at it and in the end everything worked out well.
Your issue, particularly in the light of the informed advice given in the last post, seems to be able to be resolved fairly quickly and hopefully fairly painlessly.
I wish you luck with sorting it out for your sake and your neighbours'.
The point of posting is that we thought we had a problem which was virtually impossible to resolve, but we chipped away at it and in the end everything worked out well.
Your issue, particularly in the light of the informed advice given in the last post, seems to be able to be resolved fairly quickly and hopefully fairly painlessly.
I wish you luck with sorting it out for your sake and your neighbours'.
RichardDastardly said:
Your neighbour’s conveyancer should make an RX3 application to the Land Registry to cancel the restriction. In box 9 of the RX3 form they should explain that (1) the restriction no longer protects any legitimate third party interest as for some time there has been no functioning management company and no services provided and (2) the restriction is impossible to comply with as the company that needs to give the certificate no longer exists.
Appropriate supporting evidence might be a statutory declaration from your neighbour and perhaps another neighbour confirming point (1). The conveyancer will/should be able to produce these quite easily but will probably charge a slightly increased fee to your neighbour for the overall sale transaction.
Excellent post.Appropriate supporting evidence might be a statutory declaration from your neighbour and perhaps another neighbour confirming point (1). The conveyancer will/should be able to produce these quite easily but will probably charge a slightly increased fee to your neighbour for the overall sale transaction.
One possible complication might be a requirement to obtain a clearance certificate that all payments are up to date. Its a common provision elsewhere but I dont know if it would apply in the UK. Obviously if the Man. Co. is named in the restriction, and is no longer trading, that might require a different approach.
As a developer with retained management/maintenance responsibilities it is a provision we used as a rule to make sure that owners couldn't sell up and bugger off without paying any outstanding arrears.
As a developer with retained management/maintenance responsibilities it is a provision we used as a rule to make sure that owners couldn't sell up and bugger off without paying any outstanding arrears.
Is it possible to take out an insurance policy to cover against potential loses that might arise?
I've heard of similar polices being used in situations where there are difficult to resolve legal problems, that in reality are unlikely to be a problem but nonetheless prevent a property sale.
edit: I couldn't remember the context earlier - absence of easement/access indemnity is what I was thinking of.
I've heard of similar polices being used in situations where there are difficult to resolve legal problems, that in reality are unlikely to be a problem but nonetheless prevent a property sale.
edit: I couldn't remember the context earlier - absence of easement/access indemnity is what I was thinking of.
Edited by Ed/L152 on Tuesday 9th July 11:25
Hi Guys,
Thanks for all the responses. I got a summary copy of the title via the Land registry website. I can’t see any restriction on there that applies to any management company. There is an agreement between the builders and someone called Central Networks East, but a bit of internet digging tells me that is the people who fitted the gas, electricity and water. There is a reference to the deed containing, “restrictive covenants,” but no details as to how many or who they are in favour of. I guess I need to see the full deeds to find that out.
Especial thanks to Richard Dastardly, I will pass your advice onto my neighbour, in the hope that it will help him.
Thanks for all the responses. I got a summary copy of the title via the Land registry website. I can’t see any restriction on there that applies to any management company. There is an agreement between the builders and someone called Central Networks East, but a bit of internet digging tells me that is the people who fitted the gas, electricity and water. There is a reference to the deed containing, “restrictive covenants,” but no details as to how many or who they are in favour of. I guess I need to see the full deeds to find that out.
Especial thanks to Richard Dastardly, I will pass your advice onto my neighbour, in the hope that it will help him.
RichardDastardly said:
Your neighbour’s conveyancer should make an RX3 application to the Land Registry to cancel the restriction. In box 9 of the RX3 form they should explain that (1) the restriction no longer protects any legitimate third party interest as for some time there has been no functioning management company and no services provided and (2) the restriction is impossible to comply with as the company that needs to give the certificate no longer exists.
Appropriate supporting evidence might be a statutory declaration from your neighbour and perhaps another neighbour confirming point (1). The conveyancer will/should be able to produce these quite easily but will probably charge a slightly increased fee to your neighbour for the overall sale transaction.
I suspect it won’t be that easy. If it was a leasehold property things might be different but I imagine in the case of a restriction in place for the purposes of having positive covenants run with freehold land it will be difficult to have it removed. I haven’t ever had to make such an application though, to be fair, and have my fingers crossed for OP’s neighbour!Appropriate supporting evidence might be a statutory declaration from your neighbour and perhaps another neighbour confirming point (1). The conveyancer will/should be able to produce these quite easily but will probably charge a slightly increased fee to your neighbour for the overall sale transaction.
bladebloke said:
RichardDastardly said:
Your neighbour’s conveyancer should make an RX3 application to the Land Registry to cancel the restriction. In box 9 of the RX3 form they should explain that (1) the restriction no longer protects any legitimate third party interest as for some time there has been no functioning management company and no services provided and (2) the restriction is impossible to comply with as the company that needs to give the certificate no longer exists.
Appropriate supporting evidence might be a statutory declaration from your neighbour and perhaps another neighbour confirming point (1). The conveyancer will/should be able to produce these quite easily but will probably charge a slightly increased fee to your neighbour for the overall sale transaction.
I suspect it won’t be that easy. If it was a leasehold property things might be different but I imagine in the case of a restriction in place for the purposes of having positive covenants run with freehold land it will be difficult to have it removed. I haven’t ever had to make such an application though, to be fair, and have my fingers crossed for OP’s neighbour!Appropriate supporting evidence might be a statutory declaration from your neighbour and perhaps another neighbour confirming point (1). The conveyancer will/should be able to produce these quite easily but will probably charge a slightly increased fee to your neighbour for the overall sale transaction.
loafer123 said:
Given the demonstrable insolvency and dissolution of the beneficiary, surely that should make it easier, or do you think, given the remote risk involved, title insurance would work?
The fact that the man co is dissolved is the only thing that makes removal a possibility in the first place.Unfortunately an indemnity policy doesn’t assist at all in these circumstances. The issue here is whether or not a transfer to a buyer can be registered. Unless the restriction is dealt with by one means or another, the answer to that is ‘no’ and no buyer will proceed if they’re not going to acquire the legal title to the property.
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