There needs to be three things for a covenant to have any legal force:
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The decedent(s) alive today may have no commercial/personal interest in the property.
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Enforcement can be initiated with a clear letter setting out the responsibilities of the two parties and what specific behaviour should be changed.
If the initial letter is ignored then there may be no choice but to revert to the courts. The court process then presents two immediate challenges:-
a) It is very expensive – assume that the costs will escalate to between £25 to £75K
b) It is difficult to be assured of the outcome and the eventual “winner” is unlikely to recover more than 75% of their costs. The looser would be required to amend their behaviour, pay around 75% of the other parties legal fees and their own court fees.
The potential legal risks and the threat of high legal costs can often be enough to force compliance – or if full compliance is not immediately accepted the two parties can agree to discuss the matter and seek an understanding.
Covenants and planning
Cont..
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