Q&A - Can developer claw back on restrictive covenant for property I sold years ago?

Q: I purchased one of three adjacent properties 23 years ago. The centre property subsequently suffered severe subsidence and had to be demolished. The developer paid compensation to the owner and offered me and the other property owner the option to each purchase half the land as additional garden. Within the deal was a restrictive covenant providing a claw back clause for the developer in the event that there should be any future construction on the land.

When I later sold my property I checked with my solicitor that he had made the contract watertight regarding the covenant. Now I have received a letter claiming I owe the developer £70,000 as the later owner got planning consent and built an extension on the land. The solicitor I used in the sale is no longer in business. What should I do?

A:  Restrictive covenants are usually specific to each transfer. When a property (or land, in your case) is sold the transferor binds the transferee into the covenant and normally one of the conditions of the covenant is that the transferee binds their successor into the same covenant. When each successive owner of the property registers the transfer with the Land Registry, any restrictive covenant should be shown on the title deed – assuming of course that the restrictive covenant was ever registered.

If a restrictive covenant is registered with the title deed at the Land Registry it is enforceable. If it is not on the title deed then each successive buyer has to sign a Deed agreeing to the restrictive covenant. If this does not happen the covenant is only binding on the original owner or signatory as a contract.

You are clearly in a very serious situation which could end up being decided by the courts. You need to seek the advice of a reputable long standing law firm as soon as possible.

Article 08/05/2019