The Restrictive Covenant Nobody Read

The covenant is a pre-1926 restrictive covenant; its enforceability depends on whether it was annexed to land retained by the original covenantee and whether it touches and concerns that land. The fact it has 'never been enforced' does not extinguish it: mere non-enforcement is not abandonment unless the benefited land has changed so that the covenant can no longer benefit it. The covenant appears to bind the flat and, if enforceable, could be enforced by owners of benefited land, potentially including the freeholder or neighbouring units.

Advise Marcus that the covenant creates a real risk of an injunction or damages if a beneficiary objects. The phrase 'private dwellinghouse' is unlikely to prohibit incidental home working that does not change the character of the property, but 'trade or business' is broader and could be argued to catch a consultancy. The safest course is to obtain (a) a clear report on title flagging the covenant, (b) confirmation from the lender that it will lend despite it, and (c) if possible, a deed of release or non-enforcement covenant from the freeholder and any identified beneficiaries.

You can confirm the property is a self-contained flat held on a long lease with 82 years unexpired, that it is physically configured as residential accommodation, and that the title is registered. You can confirm that the ground-floor surgery is a separate lease and does not form part of Marcus's demise. You cannot confirm that the covenant is unenforceable or that it will never be enforced; that is a matter of legal risk, not fact. You should qualify the confirmation by disclosing the 1897 covenant, noting the possibility of enforcement, and stating that the buyer's intended incidental home working is unlikely to breach the 'private dwellinghouse' limb but may engage the 'trade or business' limb. Lenders generally accept a qualified report; misrepresenting the position would expose you to a negligence claim.

Obtain the full official copy of the lease and any deeds of variation, and check whether the covenant was annexed to specific land. Search the register of the benefited land to identify potential beneficiaries. Ask the seller and managing agent for any history of enforcement, correspondence, or waivers. Review the lease for user covenants, permission requirements for home working, and any alienation provisions. Check the freeholder's title and the management company's articles. Consider whether indemnity insurance is available; if the covenant is old and unlikely to be enforced, a policy may be obtainable, but insurers will not cover a known, imminent threat. Finally, report all findings to Marcus and the lender in writing before exchange.