Ex­tor­tion­ate de­mands hold us to ran­som

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POINTS OF LAW

We own a semi-de­tached rural prop­erty, orig­i­nally bought from a large es­tate in the late 1970s, where we have lived for the past seven years. The es­tate still owns the prop­erty next door and has the ben­e­fit of a re­stric­tive covenant over our land, rul­ing out any de­vel­op­ment with­out the es­tate owner’s writ­ten con­sent. There is no men­tion in the covenant that we should make a pay­ment in ex­change for ap­proval. Last year, we de­cided to ex­tend our house slightly and build a garage on to the side. We dis­cussed the pro­posal with the es­tate owner and he said that he had no ob­jec­tion. Later, his agent wrote to us con­firm­ing this but adding that we would need to pay £700 to ac­quire his writ­ten con­sent. The agent also asked for £200 as an “ad­min­is­tra­tion fee”, al­though no de­tails were given. Surely they are not al­lowed to ex­tort money like this? We feel we are be­ing held to ran­som.

David Flem­ing writes:

Covenants of the na­ture you men­tion are quite com­mon. Usu­ally, the land of the per­son who took on the covenant has long since been sold off and it is dif­fi­cult to find out who, if any­one, now has power to ap­prove the plans for the work which the owner of the land – the sub­ject of the covenant – wishes to carry out. At least you do not have this prob­lem.

Whether pay­ment can be de­manded de­pends on the con­struc­tion of the covenant. For­tu­nately for you, a case called Sims v Ma­hon, de­cided by the High Court in 2005, says that in covenants of this na­ture there is gen­er­ally an im­plied term that con­sent to the works can­not be un­rea­son­ably with­held. The judge ex­pressly stated that con­sent could not be re­fused on the ba­sis that the covenan­tee did not wish any build­ing what­ever, or could re­ject plans on grounds un­re­lated to the pur­pose for which the power had been given. For ex­am­ple, he could not refuse if he did not like his neigh­bour or wanted to ex­tract a mone­tary price for his con­sent. Ac­cord­ingly, I think you are jus­ti­fied in re­fus­ing to pay.

Hav­ing said this, if your neigh­bour has in­curred rea­son­able pro­fes­sional fees in con­sid­er­ing the plans, you would be li­able to pay those. Frankly, I do not be­lieve that £200 is an ex­ces­sive fee for ap­proval of the plans.

David Flem­ing is head of prop­erty lit­i­ga­tion atWil­liam Heath & Co.

BRICKS&MOR­TAR

I have a 4m x 3m con­ser­va­tory which has no cen­tral heat­ing and I would like to make more use of it in the win­ter. To do this, I plan to tem­po­rar­ily fix fire-re­tar­dant polystyren­e sheets ei­ther as a flat ceil­ing at eaveslevel or as a slop­ing ceil­ing un­der the PVC roof pan­els. Which would be most sen­si­ble?

David Snell writes:

The trou­ble with many con­ser­va­to­ries is that they are re­ally only suit­able for oc­cu­pa­tion dur­ing the milder months. At cold times and in the very hottest weather they are un­in­hab­it­able. Those that have them are of­ten re­luc­tant to ac­cept th­ese lim­i­ta­tions and you get what you are try­ing to do, a “lash-up” so­lu­tion that tries, and fails, to turn it into an ex­ten­sion.

Wher­ever you place this board­ing, it will cre­ate prob­lems un­less it is in­su­lated and a clear gap is left for con­den­sa­tion. That is not easy be­cause there needs to be a clear pas­sage of air from eaves-level to ridge and the con­struc­tion of most con­ser­va­to­ries mit­i­gates against that.

What you sug­gest is a tem­po­rary so­lu­tion to an in­tractable prob­lem and you may well find that, even with the boards, the room is still too cold to use with­out quite a lot of heat be­ing pumped in. What­ever you do, do not con­nect the heat­ing to the main house sys­tem, as your bills will soar. Keep any heat­ing in­de­pen­dent and con­trol­lable for the times when you use the room.

David Snell is con­tribut­ing ed­i­tor to ‘Home­build­ing & Ren­o­vat­ing’ mag­a­zine and au­thor of ‘Build­ing Your Own Home’, avail­able at £25 plus £2.25 from 0870 155 7222.

PLAN­NING

My lo­cal plan­ning de­part­ment started pro­ceed­ings against one of my neigh­bours, who built a con­struc­tion in their back gar­den big enough to war­rant plan­ning per­mis­sion and build­ing reg­u­la­tions ap­proval, which they did not seek. In­deed, I un­der­stand they have ig­nored all com­mu­ni­ca­tion from the plan­ners.

I was ad­vised that an en­force­ment no­tice was to be served and that they would have to take it down. How­ever, out of the blue, a man­ager for the de­part­ment said he wished to see the con­struc­tion for him­self. On view­ing it, he said his de­part­ment would not pro­ceed with the en­force­ment ac­tion, stat­ing that “he had to be mind­ful not to mis­use pub­lic money” and “the fact that they are in breach of plan­ning re­quire­ments is in­suf­fi­cient rea­son to carry on”. Surely this can­not hap­pen?

John Win­ter writes:

Your neigh­bour seems an unattrac­tive per­son and one feels that it would be good for him to get his come­up­pance. But the owner has rights as well as the author­ity. The lo­cal coun­cil can use its en­force­ment pow­ers to re­move a build­ing erected with­out con­sent, but it is not obliged to do so. I do not know what hap­pened when the of­fi­cial vis­ited the site, but one can only sur­mise that what he saw did not strike him as so se­ri­ously wrong that en­force­ment pow­ers should be used.

Lo­cal au­thor­i­ties are hes­i­tant to re­quire the de­mo­li­tion of build­ings. They of­ten find the press takes the side of the owner and the lo­cal author­ity be­comes un­pop­u­lar. The lo­cal author­ity is cor­rect in stat­ing that a breach of plan­ning re­quire­ments is in­suf­fi­cient rea­son to re­quire de­mo­li­tion.

John Win­ter runs his own ar­chi­tec­tural prac­tice.

MONEYMATTE­RS

My hus­band and I are sep­a­rat­ing shortly. We own a prop­erty jointly, which is on the mar­ket and we are about to ex­change con­tracts with the pur­chasers. My hus­band wants to sep­a­rate with­out in­volv­ing lawyers, split­ting the pro­ceeds from the sale of the house be­tween us and mov­ing on. There is not much else to di­vide up ex­cept his pen­sion. He is sug­gest­ing that he would con­tinue to sup­port me. Both the chil­dren are grown up and work­ing. We are both propos­ing to buy a smaller prop­erty with the pro­ceeds of the sale of our cur­rent house.

How­ever, what hap­pens a few years down the road when one or both of us de­cides to sell our new prop­erty? I am un­der the im­pres­sion that a mar­ried cou­ple can get only one re­lief from Cap­i­tal Gains Tax (CGT). Since we would still be re­garded as mar­ried by the law, would we each be en­ti­tled to re­lief if we are liv­ing sep­a­rately?

Mag­gie Flem­ing writes:

In the sit­u­a­tion you de­scribe, full prin­ci­pal private res­i­dence re­lief would be avail­able on the sale of ei­ther or both prop­er­ties. This is be­cause, for CGT pur­poses, it is the date of sep­a­ra­tion that is im­por­tant, not di­vorce. You are treated as sep­a­rate in­di­vid­u­als, each en­ti­tled to your own qual­i­fy­ing res­i­dence, if the mar­riage has bro­ken down and there has ei­ther been a for­mal sep­a­ra­tion or cir­cum­stances sug­gest that the sep­a­ra­tion is likely to prove per­ma­nent.

Fur­ther­more, any trans­fers be­tween you in the tax year of sep­a­ra­tion are still cov­ered by the in­ter-spouse ex­emp­tion. The prob­lem that some cou­ples face is that they reach agree­ment on the di­vi­sion of their as­sets in a tax year af­ter sep­a­ra­tion. As they are sep­a­rated, the trans­fers are no longer ex­empt and, as they are still mar­ried, the law treats them un­til di­vorce as “con­nected per­sons” and deems all trans­fers to take place at open mar­ket value. This can give rise to sub­stan­tial CGT charges.

It is a worth not­ing, how­ever, that the rules are dif­fer­ent for In­her­i­tance Tax (IHT). For IHT it is only the date of di­vorce that mat­ters. The IHT ex­emp­tion for trans­fers to a spouse, ei­ther in life or on death, con­tin­ues un­til di­vorce. Th­ese rules now ap­ply to civil part­ners also.

Mag­gie Flem­ing is a di­rec­tor of Isis Fi­nan­cial Plan­ners and a mem­ber of the Char­tered In­sti­tute of Tax­a­tion.

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