The lease or transfer setting out the rules binding the owner of a property will usually contain formalities to be complied with when the property is sold to a new owner. Some such covenants are simple with minimal (if any) formality. Some contain numerous rules and provisions with which the parties must comply, both before and after the sale of the property.
The matters commonly dealt with by these covenants might include:
The requirement to obtain consent for the sale
Referencing for the prospective buyer
Requirement to enter into a deed of covenant in relation to obligations affecting the property or the estate of which the property forms part, and
The transfer of shares in a management
These and other matters have a purpose and, in default of compliance, may hinder the ability to properly demand from, or enforce against, the current owner. Compliance is therefore something that is required to assist in the management of the development.
Occasionally, by an error on the part of the seller or buyer, or more commonly their respective advisers, those provisions are not all complied with. At KDL Law we advise clients on all matters of covenant compliance including assignment and transfer formalities.
We can assist both in setting up internal processes to enable the landlord/management company/managing agent to ensure that on any assignment/transfer all procedures are complied with. We can further advise on what to do if a seller or buyer fails to comply fully with their obligations.
In our experience, formal proceedings in such matters are rarely required but the threat of the same can assist with an unwilling defaulting party to understand the need to complete any missed obligation.