Claim Case Study: Restrictive covenant Release from retained land Background The insured purchased a plot of land and began to develop a new residential dwelling on the site. This was in breach of a restrictive covenant contained within a 1959 Conveyance affecting the land and this was the reason the insured had obtained the policy.
Challenge When the development was virtually complete, the insured received a letter from a firm of solicitors acting for the beneficiary of the covenant, X Ltd, alleging that the development was in breach of the restrictive covenant. First Title noted that, to be enforceable against a successor covenantor, the beneficiary’s retained land must obtain a practical benefit from the covenant. Its investigations revealed that X Ltd’s only retained land was grass verges on an estate which it had developed. First Title asked X Ltd to clarify what land it retained and how this benefitted from the restrictive covenant.
X Ltd did not provide a substantive response, but instead threatened to issue proceedings to obtain an injunction against the insured to prevent them completing the development of the new property.
Solution Taking into account the time and costs and delays that would be incurred in disputing this claim, First Title decided that it would be prudent to negotiate with X Ltd as soon as possible and obtain the relevant release for the insured from the restrictive covenant and to facilitate the sale of the property. Negotiations commenced with X Ltd and a settlement agreed at £20,000 for the insured’s release from the restrictive covenant. This payment and the legal costs of dealing with the Deed of Release were all paid under the terms of the policy.
Call: +44 (0)207 160 8100 Email: info@firsttitle.co.uk Visit: www.firsttitle.co.uk First Title Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. First Title Insurance plc is registered in England under company number 01112603. Registered office: First Title Insurance plc, ECA Court, 24-26 South Park, Sevenoaks, Kent TN13 1DU.
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