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Law
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CASE STUDY
The ownership case involves Anna and her husband Duncan, who married in the year 2011. Anna is the owner of two properties, one of which she inherited back in the year 2001. She has a standing agreement with the current tenants to use the property as a florist, until the year 2012, when the premises will become vacant. This agreement is subject to a covenant that Anna and one of the neighbours, Barney made, such that the premises cannot hold a business that sells food and drinks.
In the year 2010 Anna leased the flat that is above the shop to Claire for a period of five years. Later on in the year 2013, Anna broke the covenant that they had entered to with her neighbour Barney, opening a restaurant in the shop.
Back in the year 2010, Anna had purchased another house, where they lived with her husband Duncan. Although this property was registered in the name of Anna, Duncan has actually contributed a quarter of the price money. In addition he had also solely paid for the carpeting of the house and a summer house that had been constructed in the gardens.
As of now their marriage is broken and Anna is planning to sell the house, theflat and the restaurant. She is also worried that her neighbour Barney may want to enforce the covenant that they made years back. She also has plans to evict Claire from the flat, so that she can have the chance to expand her restaurant into the first floor of the property.
Faheem, who is a potential buyer of the house, wishes to have the carpet and the summer house included in the sale of the house. However, there is a problem as Duncan has refused to move out insisting that the carpet and the summer house belong to him.
Advice to Anna with regard to the issue of the flat
With respect to the flat and the idea of opening the restaurant and even expanding to the first floor, Anna may find herself in more than one problem. The idea of covenants on property dates back to the 18th and the 19th century in England. They had come up during the industrial revolution, where the private land owners came together and developed the agreement of the land and property developed to conform to certain restrictions in reference to the area. Farmers for example would come together and enact a covenant that prohibited any one of the land owners from electing factories in the area; so as to protect the produce of the land and the environment in general1.Technically it is an agreement which dictates the use of property within a given neighbourhood by the various owners in the area. This is mostly tied to the maintenance of the value of the land, where the owners of the land and property may agree that certain activities such as housing businesses that sell foods and drinks in the premises, as is the case with Anna, are restricted. Covenants in themselves are legal documents as they are written with the deed or on the deed or in reference to the deed and kept on a file with the municipality or county government. The agreements made are quite serious such that they only apply to the land or the property in question and not the owner. As such, even if it had been whoever passed on the property to Anna that had signed the covenant with Mr Barney, it would still hold. And even if she managed to sell the property to someone else, they too would be held to the same terms. To avert the contents of the covenant between herself and Mr Barney, she would have to either compensate him or apply for the agreement to be extinguished. This would, however, depend on the cooperation of the neighbour as they can decide that they do not want to be paid off to protect the value of their property as previously agreed upon. Otherwise she would have to apply to the land tribunal for the agreement to be revoked, a process that most of the time is quite lengthy and costly at the same time. Considering that Anna had disregarded the contents of the agreement, it is also important to notify her that, covenants are legal and cannot be simply disregarded when one party feels the need to. There is a formal process that has to be followed for the cancellation of the same1.
Anna and Claire’s case of eviction due to the need to sell the property
In the case of evicting Claire who has a fixed lease on the property, Anna does not stand a chance of winning the same even in the court of law. One of the aspects of the fixed lease that Anna needs to understand is that, in the event that she wants to sell the house while the lease on the property has not expired, she cannot evict the tenants with the fixed leases on the property. The sale of the flat is not a reason she can give in court to defend her case. Claire would have to have violated some of the general rules and regulations that are stipulated in the tenants’ laws and...