Covenant and developmentThe estate agent has told me that there is a covenant which prohibits development on a house that I am interested in.
The house has a large garden and while I am not necessarily thinking of building on it now, I would be concerned about limiting my future options. What is a covenant? And surely by me buying the property the covenant is broken as a new purchase means a new contract.
According to Jane Mathews, partner in BCM Hanby Wallace: "A covenant relating to land is an obligation or prohibition imposed by the owner of one property over other property usually (though not always) adjoining." It not unusual to find a covenant on land which has already been divided. For example, if in the past, part of the gardens of a large period house were sold off for development, the owner of the period house might seek to control the future extent of that development by putting a covenant on the land. In other words, while he might be happy to sell off a part of his garden so that a small house can be built - he might be less happy to see in the future that house knocked down and a large block of flats put in its place.
This may be the situation in your case. Your contract to purchase the house will not automatically break any existing covenant, because, according to Mathews, "as a covenant attaches to land, it generally lasts indefinitely unless specifically removed. A covenant can be waived or removed with the consent of the landowner who is entitled to enforce the covenant only." Removing a covenant usually involves buying it out - and there's really no predicting how much that might cost. This is something that you absolutely must seek legal advice on before you do anything - some covenants are easily removed with the payment of a relatively modest fee, others will involve you in labyrinthine legal dealings which you might not be happy to start. Every case is different and only your solicitor, looking at the legal documents, can advise you.
Fees for estate agents
We have had two agents out to look at our house on the northside of Dublin which we will be putting on the market soon. One quoted fees of 0.8 per cent, the other 1.2 per cent. It seems to me that both are offering the same service but I'm a worried that it's somehow fishy to be quoting so low.
There is no standard fee for estate agents. A couple of years ago 1.5 per cent was the fee that just about all agents in Dublin were charging but competition in the market has brought the prices down. Is the agent with the lower fee new to the area? Agents trying to break in to a specific neighbourhood often quote low in order to get a toe-hold in the area. All you need to do is make sure that you are getting good service. Does the agent have enough staff to handle your viewing? A reader reported to us that she took her house off one agent and gave it to another after hearing that a potential buyer was unable to make an appointment to view, as the estate agent was "too busy". Do you have a good relationship with the agent selling your house? It's all about service - not fees - so if you're getting the service you want at 0.8 per cent, go for it.
Send your queries to Property Questions, The Irish Times, 10-16 D'Olier Street, Dublin 2 or e-mail propertyquestions@irish-times.ie.
Unfortunately, it is not possible to respond to all questions. The above is a representative sample of queries received. This column is a readers' service and is not intended to replace professional advice. No individual correspondence will be entered into.
