Does anyone have legal advice in this situation (Covenants)?

Question

HI
I have a question regarding covenants in residential estates.
If one of the covenents on the deed of covenants signedby I, was the requirement to erect a house of 230m2 and i built a house that was 200m2, without notifying the seller, what could be the worst action that they could take. It says also that changes to the concept house plans must be resubmitted before doing.

Realistically, they could not possibly know that the size difference has changed without getting out a measuring tape, however i would like to know the punishment.

The only thing that it says in the convenants is that the seller may enforce its rights against the buyer (Me), by way of injuctions, in respect to any breach thereon or any attempt to do so. Does this mean, in the case of breach that all that they can achieve is an injunction.

Also, I don't see how these actions would cause them financial losses, so you cannot be suid for that.

Answer 1

I doubt that they are limited to an injunction. To avoid fraud, I recommend full disclosure. I believe monetary damages could be sought, i.e. the difference in value between the house they expected to get pursuant to the contract of sale and the house they actually got. Because the problem with the house is a latent defect, as opposed to a patent defect, the duty is on you to disclose.

You are better safe than sorry. If they agree to buy the house as is and they acknowledge the problem but do not care, then it is on them. You can even offset the price because of the defect, ensuring that they considered the defect and cannot later claim that the contract is voidable because it lacks a "meeting of the minds".

If you do not disclose and they find out later, it will not be fun for you.

Answer 2

First, you need to make sure the convenant is valid and the burden ran to you, and the benifit runs the party who will enforce the covenent. Assuming this is so, we can look at the possible remedies.

There are two types of remedies for breaches of covenants: legal and equitable. Legal damages would be for money, and equitable damges could be for money or an injunction. One of the key requirements for an injuction is that there be no adequit remedy at law. When land is involved, any damage to land is consider irreparable at law, since all land is unique. Therefore, my understanding of the injuction clause is that it's intend is to clearify this, by stating clearly that the parties agree that an injunction would be allowable.

In deciding what injunction might be imposed, you need to know why the covenent was breached. If it was by mistake, then it's highly unlikely that an injuction to tear the house down would be ordered, but there could be money damages.. If however, it was done with full knowledge of the covenent and knowing that the house was the wrong size, then the court might be more strict. There are cases where courts have ordered floors from high rises removed for violating a covenent. You could be ordered to comply by expanding the house to the required size.

And you could be sued for damages. They could say property values have been decreased, or simply their views are not what they expected. Pretty much anything that effects land is worth money.

It's not a good idea to knowing break a covenant.

Answer 3

In the worst case scenario, they could get a court to award injunctive relief and order you to remove the non-conforming house and replace it with a conforming one.

Richard