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senior partner
senior partner, Solicitor
Category: UK Property Law
Satisfied Customers: 13325
Experience:  30 years commercial law
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We are considering the purchase of a property which is bound

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We are considering the purchase of a property which is bound by a restrictive covenant forbidding business or trade activities. The beneficiary of the covenant is one neighbouring property, to which the land was originally part. We've spoken to the owner, and he has verbally indicated that he's prepared to lift the covenant so that we can operate our small (non nuisance) electronics manufacturing business from the detached garage/flat. He seems a perfectly reasonable man who says a tray of beer is sufficient compensation providing that his legal fees are paid. However, when he goes to his solicitor, are they likely to take the view that a tray of beer is insufficient compensation and that a substantial financial compensation is more appropriate. Either way, were we agree on a suitable compensation, is the lifting of the covenant then a formality which can be resolved quickly? Additionally, is it possible to simply re-write the covenant in such a way as to allow us to operate our specific business, yet afford him continued protection in the event of us selling at a future date?
Thank you for your question. Yes lifting or relaxing the covenant is fairly straight forward - it will require a deed of variation but it is not complicated. Agains yes the variation can be restricted to your business but if possible it would be better to get the covenant released altogether as it could enhance the value of you property a little.

Customer: replied 4 years ago.

I appreciate there is no difinitive answer to this, but in your experience is his solicitor likely to recommend to his client that he persues finantial compensation, given that lifting the covenant is potentially increasing the value of 'our' property while at the same time potentially reducing the value of his? Also, what are the timescales for resistering any change with the Land Registry>

there is no rule that apart from paying the costs there should necessarily be any fee payable and it certainly should not be material . It is not really up to the solicitor - it is up to the landowner although the solicitor might suggest it , if his client does not want to charge there is no reason to insist.
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