Deed of Covenant explained by Sheffield Solicitor

Whether you are buying or selling  a property where the freeholder is the Sheffield Council (usually as a result of the original lease being granted  under the Right to Buy Scheme) most leases provide that the new buyer must enter into a Deed of Covenant. The Conveyancing Sheffield Team are used to ensuring that all leasehold requirements are dealt with.

One of the  three main types of assignment conditions is the requirement for a Deed of Covenant :‐ The seller often has to ensure that the buyer enters into a deed of covenant with the landlord/managing agent or management company. In this way the landlord or management company has a direct contract with the  buyer and prior notification of the new lessee.   A Deed of Covenant is usually provided in a draft form to the purchaser’s Conveyancing Solicitors by the seller’s Solicitors in the course of a Conveyancing transaction. The purchaser’s conveyancing solicitors will then produce the final deed to be executed by the buyer to confirm they will comply with the terms of the existing lease. Deeds of Covenant are often used in conveyancing to ensure a new purchaser agrees to pay any service charges that may be levied against a property for such things as paying for maintenance and repair of common areas.

The standard form of deed of covenant is illustrated below in this Sheffield Conveyancing transaction:



COUNCIL HOUSE SALES/DEED OF COVENANT            

H. M. LAND REGISTRY

LAND REGISTRATION ACTS 2002

 

COUNTY:           South Yorkshire
DISTRICT:         Sheffield
TITLE NO. :         SYK
PROPERTY:
DATE:

 

1.     IN this Deed of Covenant:


“the property” means the property more particularly mentioned above
“the Council” means The Sheffield City Council
“the Original Purchaser” means
“the Sale Deed” means a Conveyance or Transfer dated the                      day of   
and made between the Council of the one part and the Original Purchaser of the other part whereby the Council pursuant to Part V of the Housing Act 1985 – or earlier provisions consolidated therein – sold the Property to the Original Purchaser
“the Transferor” means
“the Transferee” means
“the Transfer” means a Transfer of even date herewith and made between the Transferor of the one part and the Transferee of the other part whereby the Transferor transferred the Property to the Transferee


2.   THIS Deed made between the Transferee of the one part and the Council of the other part is supplemental to the Sale Deed and executed pursuant to the provisions of Clause 6 thereof

3,   THE Transferee (for the Transferee and the successors in title of the Transferee) HEREBY COVENANTS (jointly and severally if more than one person is described as the Transferee) with the Council:-

(1)  To pay to the Council upon demand the sums of money arising under or by virtue of the provisions of Clause 5 of the Sale Deed in accordance with the provisions contained or referred to in that Clause
(2)  To ensure that every person to whom the Property is hereafter further transferred will contemporaneously with each such further transfer:-
(a)    enter into a Deed of Covenant (in duplicate) with the Council in a form prescribed by the Director of Legal Services, or other duly authorised officer of the Council similar to the form of this Deed and
(b)    forward such Deed of Covenant (in duplicate) to the Council for execution by the Council (and retention of the Duplicate) within ONE MONTH after such transfer

4.   IN consideration of the foregoing covenant by the Transferee the Council HEREBY RELEASE  the Transferor from the obligations contained or referred to in Clause 5 of the Sale Deed SAVE AND EXCEPT in respect of any breach by the Transferor of such obligations occurring prior to the date of the Transfer

5.   THE Council and the Transferee HEREBY APPLY to the Chief Land Registrar for the entry on the Proprietorship Register of the above title of a restriction in the form set out in Clause 7 of the Sale Deed

SIGNED as a Deed AND DELIVERED by the )
Transferee in the presence of:-                        )



EXECUTED as a Deed by The Sheffield )
City Council
whose common seal Was    )
hereunto affixed in the presence of:-        )


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