What are covenants?
Simply put, covenants are obligations or rules, and can affect either Freehold or Leasehold land. They can be classified as either positive or negative.
- Positive covenants impose an obligation to carry out some positive action (which typically requires money to be spent). An example would be the obligation to maintain a property’s boundary fence.
- Negative covenants – also known as restrictive covenants – can restrict the use or enjoyment of a property. An example would be a rule not to extend a property without a particular person’s consent. A property falling under a restrictive covenant may be referred to as ‘burdened land’.
Unlike positive covenants, restrictive covenants run with the land – they are tied to the property, not the current owner, and continue to affect the property’s future owners – so it’s important for a buyer to find out whether the property they’re buying is under any restrictive covenants.
How do you know if restrictive covenants affect your property?
Since 13 October 2003, a restrictive covenant should be protected by the entry of a notice in the charges register of the burdened land. Therefore you should be able to determine whether your property is subject to restrictive covenants simply by inspecting your title register.
What happens if you breach a covenant?
Restrictive covenants are highly technical so it is advisable to seek legal advice.
However, what happens depends on whether the covenant is enforceable. If so, you could be forced to undo any offending work (such as removing an extension), pay a fee or even face legal action.
Whether a covenant is enforceable may depend on how long it has been breached: case law has suggested that if a covenant has been breached for 30 years then enforcement action cannot be taken. For example if the covenant states no flats are to be built on the land but the flats have been on the land for 50 years then case law suggests the covenant is unlikely to be enforceable.
If it has not been 30 years since the breach, do not panic – your solicitor should be able to take out a restrictive covenant indemnity policy for you. An indemnity policy costs anywhere from £50 to several hundred pounds dependent on the value of the property and risk of enforcement. The fee is a one off and will last in perpetuity and can usually be passed on to future owners of the property.Read More
In the Budget released on the 22nd November 2017 the Chancellor of the Exchequer announced a relief from stamp duty for first time buyers!
First time buyers purchasing their first home for under £300,000 will pay no stamp duty (SDLT). If the purchase price is over the £300,000 threshold but not exceeding £500,000 they will pay 5% on the amount above £300,000.
Prior to the relief being announced first time buyers would have paid the full stamp duty. For example on a property worth £270,000 would have had a £3,500 stamp duty fee payable. On a property worth £350,000 before the relief came into effect would have cost the first time buyer £7,500, whereas now it only costs £2,500!
Conditions for the relief
- The purchase is a single dwelling
- Property price is not more than £500,000
- The purchaser or purchasers are first time buyers intending to occupy the dwelling as a main residence
- Linked Transactions – other than the linked transaction being the purchase of a garden, grounds on interest or rights in the land that benefit the dwelling, such as rights of way.
Who qualifies for the relief?
As a first time buyer you will qualify for the relief if you meet the following criteria: –
- The property must be of a single dwelling, for example a house or a flat.
- The purchase price must be under £500,000.
- The purchaser(s) must be individuals – if there is more than one purchaser, each individual must be a first time buyer.
- The property will be the buyer’s main residence.
- The effective date of the purchase (the completion date) must be on or after 22nd November 2017. You can have exchanged before this date.
- Not to be linked to any other transaction.
How does the purchaser claim the relief?
On completion your appointed solicitor will complete the Stamp Duty Land Tax return. The relief will be applied for within this form.
If you have any questions regarding the above, or if you wish to purchase your first property please contact us on 0208 669 5145 and ask for Gavin Cooper.Read More
Carpenter & Co secures Law Society’s conveyancing quality mark
Carpenter & Co in Wallington has once again secured membership to the Law Society’s Conveyancing Quality Scheme – the mark of excellence for the home buying process. This is the 5th year in a row that Carpenter & Co has achieved CQS accreditation.
Carpenter & Co underwent rigorous assessment by the Law Society in order to continue to hold CQS status, which marks the firm out as continuing to meet high standards in the residential conveyancing process.
Law Society President Andrew Caplen said that the CQS accreditation is the hallmark of high standards and establishes a level of credibility for regulators, lenders, insurers and consumers.
CQS is the quality mark of the home-buying sector and enables consumers to identify practices that provide a quality residential conveyancing service. With so many different conveyancing service providers out there CQS helps home-buyers and sellers seek out those that can provide a safe and efficient level of service.
Paul Verlander, Senior Partner says:
Carpenter & Co is delighted to have secured CQS status. Buying and selling a home can be a stressful time. By looking for a CQS firm like Carpenter & Co the public can seek out a firm that has proved its commitment to quality.
The overall beneficiaries will be clients who use Carpenter & Co when buying a home. They will receive a reliable, efficient service as recognised by the CQS standard.
The scheme requires practices to undergo a strict assessment, compulsory training, self reporting, random audits and annual reviews in order to maintain CQS status. It is open only to members of the Law Society who meet the demanding standards set by the scheme and has the support of the Council of Mortgage Lenders, the Building Societies Association, Legal Ombudsman and the Association of British Insurers.
For more information on the Law Society’s Conveyancing Quality Scheme visit www.lawsociety.org.uk/cqs
Or contact the CQS Unit on 020 7316 5550 or CQS@lawsociety.org.uk.Read More
Thinking about a Lease Extension?
If your Lease is subject to a long lease but has 90 years or less left you should consider getting a lease extension. It is important to have a long lease and once a lease term goes below 80 years, it may become difficult to sell or re-mortgage. Therefore, trying to sell a property with a lease of 80 years or less limits you to cash buyers only.
Why do I need to extend my Lease?
When a Lease starts to run out the property loses value. Most buyers will only look at Leasehold Property with more than 90 years left on the Lease. If a Lease runs out the property is reverted to the Landlord.
Bear in mind, if a Lease drops below 80 years a Lease Extension becomes more costly as there is an element called the “marriage value” which has to be taken into account.
What can I do about this?
You may be able to extend your lease on a voluntary basis with your landlord, however bear in mind that the terms may not be favorable and he/she may offer you a shorter term in return for a higher premium and an increased ground rent. You should seek advice from an expert surveyor to ensure you are getting the best possible deal.
If you landlord is unwilling to grant a lease extension or his/her terms are unfavorable, you can force the lease extension under the Leasehold Reform, Housing and Urban Development Act 1993. You will need to meet the criteria of having owned the property for 2 or more years to do this.
Although the process can take anything up to 12 months to complete, you will end up with a lease extension of 90 years on top of your remaining term and the ground rent will be reduced to a “peppercorn” (essentially, zero). The long lease coupled with the zero ground rent is a very attractive prospect for any potential buyer.
If you need any advice regarding the above please contact Karen at KarenM@carpenterssolicitors.co.ukRead More
Japanese knotweed – what you need to know
Japanese knotweed is a common invasive plant. It forms canes that can sprout up to 3 metres in height, but these are just ‘the tip of the iceberg’. There are also networks of rhizomes that spread sideways underground, causing structural damage and threatening a building’s foundations. In fact, Japanese knotweed is ranked number one on the Environment Agency’s list of the UK’s most invasive plants.
To make matters worse, knotweed is found all over the country. Locally, there have been confirmed reports of it in Carshalton and South Croydon.
Statistics from a YouGov survey show that 78% of those aware of the weed would be put off buying a property if they discovered the weed was present. Of the reasons why, 69% of people are concerned that it is not easily removed, 56% believe it would be too costly and 57% are concerned it would be too time consuming.
Implications when buying a property with Japanese knotweed
The presence of knotweed on a property does not need to be a deal breaker but you do need to know what you are taking on.
The first thing to understand is that removing knotweed is a difficult task best left to professionals – a DIY approach will typically be ineffective and can even make matters worse.
When it comes to buying a property with Japanese knotweed some lenders may become cautious as it may affect the security of their loan. As soon as you know the property you are selling/buying is affected by Japanese Knotweed you should seek expert advice. They will be able to advise you on the scale of the problem and advise you of the best course of action.
There is no quick fix to managing knotweed. You need to take into consideration the costs and timescales involved. Whether you plan to deal with it yourself or are relying on the seller to do so, the work should be carried out by a reputable firm, and you should insist on guarantees against regrowth.
If you need advice regarding the above please contact us on 02086695145.
Are you a first time buyer? Are you familiar with the process of becoming a home owner? Here are the “Top Tips” from our Property Team to make the process a little easier to understand.
Firstly, moving can be expensive so make sure you know all of the costs involved so there are no unexpected surprises:
- Estate Agents’ Fees
- Solicitors’ Fees
- Stamp Duty
- Survey Costs
Getting a fixed fee quote from your Solicitor will give you clarity about this part of the cost and reassurance that it won’t escalate. Watch out for firms who offer a low base cost but then charge extras for dealing with help to buy ISAs, filing stamp duty, exchanging and completing within a week.
Instructing a Solicitor
To make the transaction as easy as possible you will need to instruct a Solicitor. Instructing a local Solicitor can be beneficial, especially when you may need to sign documents at short notice, as you can attend the office to meet with them and discuss any questions you have.
Freehold vs Leasehold
There are extra considerations when purchasing a leasehold property rather than a freehold, so it’s important to understand what these terms mean.
- You will own the property outright.
- You will not have to pay Ground Rent.
- With leasehold property, you own the property and its land for the length of your lease agreement with the freeholder.
- When the lease ends ownership will return to the freeholder, unless you extend the lease.
- Most flats and maisonettes are owned leasehold.
- You must budget for the Ground Rent and Service Charge payable.
- Make sure you check with your agent how long is left on the lease for the property.
- Ensure that none of the covenants will affect your proposed use of the property, as some leases prohibit subletting.
- Check that there are appropriate rights of access, i.e. do you have a right of access to the bin store?
The House-buying Process