Grand Designs - what to consider when buying buildings or land
Friday, 2nd September 2016
In this article we focus on two important factors to take into consideration when buying buildings or land for development; whether a building is listed and whether the land is subject to any restrictive covenants.
Buildings or particular features of buildings may be 'listed' because of their architectural or historic importance. This means that specific consent is required from the local planning authority (LPA) to demolish the building or to alter or extend it if the works would affect its character as a building of special interest'.
Listed building consent is separate to planning permission. Certain types of development might fall within 'permitted development' and therefore whilst the development might not require planning permission, it might require listed building consent. It is a criminal offence to carry out unauthorised alterations to a listed building.
It might be the building as a whole or certain features of a building which are listed - such features can be internal, such as fireplaces, or external, such as walls or trees. Whether consent is required is a matter of individual judgment. It might be that as a listed building owner, you do not think that you require consent but that the local planning authority deems consent is necessary.
Your solicitor will carry out a search with the Local Authority prior to your purchase of a building for redevelopment and the search will reveal whether that building is listed or not. You can then consider your development proposals in light of this and, if necessary, the Local Authority can advise whether your proposals would require their consent.
Land purchased for development with or without buildings constructed on it at the time of acquisition can sometimes be subject to restrictive covenants. Restrictive covenants impose a restriction on the use of land and can prohibit the construction of additional properties on a site, alterations to existing properties or changes of use. Covenants can impose an array of restrictions and are usually imposed when an area of land is originally sold off from a larger area to preserve how that land is used. These covenants will be contained within the title documents to the land and may be several decades old. However, it is important to remember that even if a restrictive covenant is imposed in a document that is many years old, this does not necessarily mean that it is no longer relevant.
It will be necessary to consider who has the benefit of a restrictive covenant and therefore who could enforce any restrictions against development. Your solicitor will check the title documents as part of a purchase transaction and advise you as to whether the covenant is likely to be enforceable. There may be several reasons why it is no longer enforceable such as where the covenant does not touch and concern the land i.e. that it does not affect how the land is used or does not affect the value of the land.
If the covenant appears to be enforceable and therefore imposes a restriction on development, this is not the end of the road. There are several options for dealing with such a restriction:
1. The restrictive covenant can be expressly released by the person or company with the benefit of the covenant if that person or company can be found. However, sometimes a party with the benefit of a restrictive covenant may require payment before they are willing to release the restriction;
2. Restrictive covenant indemnity insurance can be put in place which will provide financial compensation in the event that the person with the benefit of the covenant tries to enforce it. It is important to remember that obtaining such insurance will be very difficult, if not impossible, if contact has been made with the party benefitting from the restrictive covenant; or
3. Finally, an application can be made to the Land Tribunal to remove or modify the restrictive covenant. However, this can be a long process particularly if the application is disputed.
Please bear in mind that whether a building is listed and whether the land is affected by restrictive covenants are only two considerations to be taken into account, whether you are looking to purchase a site for development, or looking to develop a site that you currently own. Since each building or site is unique your solicitor can undertake a full review of the title documents and carry out searches to ensure that any potential issues are identified at the outset. This can then ensure that you avoid an unnecessary outlay of costs in obtaining planning permission or carrying out works to find later that the development is in breach of any legal restrictions.
This article explains some legal concepts under English Law in general terms and is not a substitute for taking professional legal advice for your specific circumstances. If you would like further advice regarding any of the points set out above, please contact us.