Rights/Obligations for Buyer Flashcards
Whether buyers can be given informal permission or whether they need a formal easement (right of way)
Whilst it is legally possible for a buyer to have access to a right of way via a licence, this is not commercially realistic
- Buyer is unlikely to agree to an informal permission as this can be withdrawn from the seller at any time
- A mortgage lender will not lend on a property with no guaranteed right of access
Therefore, seller is unlikely to find a buyer if only offering an informal permission (where a right of way is appropriate)
- The seller will need to grant an easement
NOTE the legal issue with an easement: easement or a licence?
Why a buyer (and their lender) will not be happy with an informal permission.
Legal issue = easement vs informal permission (licence)
Buyer does not want an informal permission as:
- The seller can withdraw the right at any time
- Remedy available the buyer is limited
- No guarantee of their right/access and the buyer cannot enforce it at law
- Mortgage lender will not lend on a property without guaranteed access
Therefore, buyer will likely insist on an easement - commercially viable for the seller to allow this, otherwise will struggle to sell
Buyer covenant to contribute to maintenance of the property
A buyer can be required by means of a covenant to contribute to maintenance (therefore, this is possible legally)
- Positive covenant - explain briefly what this means
Legal issue: whether it binds successors in title
- Provided this is drafted correctly, it may also bind successors in title (if doctrine of mutual benefit/burden applies)
- Positive covenants - issue of chain of indemnity which is not ideal
Commercial issue:
- Commercial advice: prospective buyers may be deterred by an obligation to maintain a statute as they do not know the costs involved
- Advise the client on the issues this may create in trying to sell the property
