Covenant, no idea what it is

Discussion in 'The Buying/Selling Process' started by GlennG, 16th Oct, 2009.

  1. GlennG

    GlennG Member

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    I'm about to exchange contracts

    In the title search I see:

    1. Reservations and conditions in the Crown Grant(s)
    2. H7591 Land excludes materials
    3. H7591 Covenant

    My conveyancer didn't seem concerned about the covenant and hasn't found out about it. There is no document with the contract that explains what it is.

    Is the fact that it has the same number H7591 as the one about the Land excludes materials indicate that it is about mining?

    Anyway, the basic question is whether I should find out about this or do you think it's unimportant
    Many thanks in advance for any ideas
     
  2. cu@thetop

    cu@thetop Member

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    Get your conveyancer to do the search before signing- who knows you may be able to use the results to negotiate a price reduction.
     
  3. Kristine..

    Kristine.. Broker and Raconteur

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    Hi Glenn

    Welcome to the Forum!

    Definitely find out what restrictions the Covenant may place on the use of the land.

    Many titles have a 'no mining' covenant but this may be a 'no excavation' covenant, which has significantly different restrictions.

    My Neice bought a standard residential property in Melbourne with a 'no excavations' covenant and when they lodged an application for an in-ground swimming pool the pool would of course have required excavation so the permit was refused by Council and they had to take the matter to Court - not just VCAT, Court - and it took about twelve months, and many thousands of dollars, to gain permission to excavate the block for construction of a pool.

    Take nothing or granted and make sure all searches are complete

    Cheers
    Kristine
     
  4. josko

    josko BluePlanet-Green Shackles

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    I am shocked that your Conveyancer hasn't enquired about this.

    Covenants in NSW will include Restrictions on the Use of Land.

    To mention a few, this can include:

    1. Easements (which can devalue your land).
    2. Right of way.
    3. Restriction on Fixtures as Kristine mentions above.

    You'll want to know about those!

    Regards JO
     
  5. GlennG

    GlennG Member

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    Thanks for the answers and opinions.
    I'm rapidly losing confidence in the conveyancer. I just talked to her and she told me to 'just sign'. When I brought up the issue of the unknown covenant she said that I had 5 day cooling period and she had now asked the vendor's solicitor for the covenant info. But would that encourage the solicitor to find the document if it is known that I've signed? And I had to remind her that I would be up for the 0.25%!

    If she gets the info and thinks all is ok, is it reasonable to expect her to email me and state clearly that the modified contract and the covenant stuff was all fine and that it was ok to go ahead and sign? I don't think that I would have even thought of that if all was going well, but as I say I think I'm losing confidence in her.

    Is there any way that someone like me can find out what the covenant is?

    Cheers
     
  6. twodogs

    twodogs Member

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    Use a solicitor not a conveyancer! Sorry, not great advise really but I wouldn't trust such a big transactions to somene without the knowledge that goes beyond the day to day buying and selling. Not that covenants are anything else but day to day. I think you can get info from LTO, but how, and would you understand what you got are questions you may ask yourself.
     
  7. buzzlightyear

    buzzlightyear Member

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    Why don't you ring the NSW titles office and make some enquiries?
     
  8. REHQ

    REHQ Member

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    If you have purchased land to be built on - it may also include what and how you will be allowed to build e.g. size of property, no zinc-alum sheds etc...

    Developers have these details and should form part of the contract.

    As mentioned - if you are not confident with your conveyancer - seek solicitor.

    Good luck.
     
  9. GlennG

    GlennG Member

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    Thanks Buzz, and thanks to everyone else who has replied.

    Answer to Buzz, because I thought if it was that simple then my conveyancer would have suggested that I do that, or she would have done it herself. And she wouldn't have told me that it would take the vendor's solicitor several days to do it.

    But taking your advice, yes it was a simple thing to get at the covenant. Took a while to find my way around the webpage and if anyone else needs to do it then:


    http://www.lands.nsw.gov.au/
    Go to Online Shop (https://lpi-online.lpi.nsw.gov.au/cgi-bin/lpis/menu.pl ) then look for 'Dealing Image' in left hand pane. You would then agree to conditions and then do your search using covenant number and lot & plan number i think it was.

    Well, as soon as I saw that it was something from 1958 I thought that it shouldn't be too much of a problem, but I've typed out what I believe to be the relevant bits so I'd be interested in how someone with more experience than me sees it:


    Annexure A
    AND the transferce for herself her executors and assign and so as to bind the land transferred in the hands of the owners and occupiers of the same for the time being COVENANTS with the Transferor its successors and assigns that the transferee will not erect or permit to be erected on the lot hereby transferred any building unless and until the plans and specifications for the design for such building shall have been approved in writing by the Transferor or its successors and assigns and that only one main building shall be erected on the said lot hereby transferred and same shall be used for residential purposes only and the Transferee also covenants with the Transferor but only during the ownership threof by the Transferor its successors and assigns other than purchasers on sale that no fence shall be erected on the land hereby transferred to divide it from such adjoining land without the consent of the Transferor its successors or assigns but such consent shall not be witheld if such fence is erected without expense to the Transferor itsg successors or assigns other than purchasers on sale and in favour of any person dealing with the Transferee such consent shall be deemed to have been given in respect of every such fence for the time being erected “AND for the purposes of Section 88 of the Conveyancing Act 1919-1932. IT IS HEREBY FURTHER AGREED AND DECLARED THAT

    a) The land to which the benefit of the above covenants is intended to be appurtenant is the whole of the land comprised in Deposited Plan Number 2XXXX other than the land hereby transferred.
    b) The land which is to be subject to the burden of the above covenant is the land described herein.
    c) The above covenants or any of them may be released varied or modified with the consent of the Transferor its successors and assigns.
    Signed at Sydney 15th May 1958

    Annexure B
    EXCEPTING AND RESERVING thereout all mines, veins and seams of coal and ironstone and all other mines minerals and metals lying within or under the said land hereby transferred together with full and free liberty and power for the said Housing Construction Company Limited its successors and assigns and its Lessees agents and workmen and all other persons by its authority or permission now or hereafter given at any time and from time to time but only by underground dig raise make merchantable carry away and dispose of the said coal ironstone and maintain and use all such pits shafts levels drains watercourses reservoirs ways part thereof as may be necessary or convenient for all or any of the purposes aforesaid making from time to time nevertheless to the said transferce his executors compensation for all damage thereby done or occasioned to the said lands or any erection buiding engine machinery or thing now being or hereinafter to be therein or thereon.

    Thanks again
     
  10. RightValue

    RightValue Member

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    So it's a single dwelling covenant with the land developer having the right to approve of the house plans and not being liable to pay for fencing.

    ...ohh and you can't mine or turn the place into a quarry.

    These are pretty standard covenants from that period.

    cheers

    RightValue
     
  11. GlennG

    GlennG Member

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    Reassuring, but what is this

    "until the plans and specifications for the design for such building shall have been approved in writing by the Transferor or its successors and assigns"

    Who are these 'successors' and 'assigns'
     
  12. RightValue

    RightValue Member

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    Generally those who buy the subdivision or inherit the subdivision or the company that did the subdivision.

    Once a house is built (after the plans have been approved) this part of the covenant is void.

    These covenats are being written into most subdivisions today in similar forms... it just protects the value of the area by ensuring that appropriate houses are built.

    RightValue
     
  13. bespoke

    bespoke Member

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    Do they last forever and who cares?

    So how long is a covenant policed? Surely after 50 years the developer and their sucessors wouldn't give a toss what you did and I doubt many of the residents would remember the covenant anyway.

    I have a block of land with a few covenants on it regarding the type of construction,type of fence allowed, living on the block (presumably in a garage or van) before building etc, and I was told by someone that these covenants are put in place to protect the value of the land whilst the developer still has an intrest ie: unsold blocks. Still, didn't stop one person, who was about the 3rd to build, discretly living in a van for about 8 weeks whilst he finished of his house, and no one complained that I know of.

    After their interset in the land has gone, I doubt the developers would be prepared to pay out to sue anyone breaching the covenant. I suppose other residents could though, but after 50 years.... care factor?
     
  14. GlennG

    GlennG Member

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    I'm glad I found out about it (thanks to helpful people here) - just for peace of mind.
    Because these covenants get left on, people probably become blase and just assume that they are ancient and no longer relevant. Sooner or later somebody might buy without checking and get caught out.