Rules for living in Newbuild Homes
A common complaint from someone buying a newbuild home is that there are so many rules and that they were not told and wouldn’t have bought the house if they had known!.
When a developer builds an estate, they lay down rules in the form of legally binding Covenants , as to how the estate is to be managed and the character and amenity of the estate is to be protected .
Covenants control the use of newbuild homes
Covenants are not exclusive to newbuild homes. Landowners have been imposing covenants on land for centuries.
Covenants on estates of newbuild homes can be more extensive than those that have been imposed on older properties. This largely reflects modern life as there are more matters to consider for example, satellite dishes, cars, noisy hi-fi and so on.
Covenants are a form of private planning control, placing restrictions on the development or use of the land for the benefit of another piece of land –normally the remainder of the estate.
Covenants on estates with newbuild homes can be enforced not only by the developer, but also by the neighbours. It is not uncommon for the estate to be ‘managed’ by a Management Company which is run by the residents on the estate and who ensure that the Covenants are enforced.
Any breaches or non-observance of any of the Covenants imposed may result in legal action being taken against the current owner of the newbuild home by those that have the benefit of the Covenants (the developer, the neighbour or the management company).
For how long are Covenants imposed?
The Covenants are initially set down in the Transfer Deed on the first sale of the newbuild home. Once the purchase is completed and the title Registered at the HM Land Registry, the Covenants are entered into the Charges Register of the title and remain on the title even after the newbuild home is sold on and bind all future owners.
The Covenants can be Restrictive in nature – that is telling the owner of the newbuild home what they cannot and must not do, for example, not to build on the front of the property or use the garage for anything other than as a garage for a motor car, not to erect a satellite dish. These are known as Restrictive Covenants. Other Covenants are positive in nature and are known as ‘Positive Covenants. These set down what the owner of the newbuild home must do, for example, pay the Management Company the Estate Charge, being a proportion of the cost of managing the estate; to keep the garden cultivated or to maintain fences and hedges or contribute to the cost of the upkeep of a shared driveway. As a general rule, Positive Covenants are not enforceable against future owners of the newbuild home unless the owner of the property is gaining a direct benefit from the observance of the Positive Covenant an example would be the contribution to the upkeep of the road.
A common mechanism to ensure that future owners of the newbuild homes on the estate are bound by the Positive Covenants is the use of a Deed of Covenant in which each new owner of the newbuild home must sign a Deed directly covenanting with the developer or the management company to observe the covenants.