Designated Rural Area Restrictive Covenants S157 Guidance Notes

Restrictions on transferring ex-Council Houses to people outside Devon

Frequently Asked Questions and Guidance Notes

What is a Rural Area Covenant or s157 Restriction?

A Some of the ex-Council houses in South Hams can only be transferred with the Council's consent. This will only be agreed if the property is being transferred to someone who has lived and/or worked in Devon for the previous three years. If consent is not obtained, the Land Registry will not register the transaction and the sale will be void.

Why does this still involve the Council?

The covenant means Council's consent is needed for houses sold before the dates set out below.

Which houses are affected?

Houses bought under the 'Right to Buy' Scheme from South Hams District Council before 22 March 1999.

For houses sold after these dates please contact LiveWest.

Does this apply to houses in all areas within the South Hams?

No - it will usually apply to the ones in designated rural areas or areas of outstanding natural beauty or Dartmoor National Park, outside the main towns of Dartmouth, Kingsbridge, Ivybridge and Totnes.

What does the restriction / covenant say?

Prospective purchasers must have lived (which means having his/her principal home) and/or worked in Devon throughout the three years immediately before the date of the proposed purchase of the property. If these conditions are met then the Council must give its consent.

What does this mean?

On any sale or assignment of lease of a property to which the restriction applies, you must obtain the Council's written consent to the sale. If you don't, the Land Registry will not register the transaction and the sale will be void. Please see 'for details of how to apply for consent.

Is this restriction legal?

Yes. The rules are set out in sections 157 to 162 of the Housing Act 1985.

What is the point of the restriction, and will it be relaxed in any circumstances?

The restriction helps local properties to be available and affordable to local people. This is important in areas like the South Hams where people would like to move to from other parts of the country or invest in a holiday home.

However - there is an exception where the potential purchaser has lived in the South Hams District for a cumulative total of seven years out of the past 20 years.

Can we buy in joint names?

Yes, and only one person must meet the qualifying conditions. However, the house must be put either in joint names (including the name of the qualifying person) or just in the qualifying person's name.

Are there exceptions?

The Council's consent may not be needed:

  • if the property is being transferred from joint to sole name (or vice versa) or
  • inherited under a will or intestacy

Please check with your solicitor.

What about renting the house out?

Any renting or letting of properties subject to the covenant must also be to tenants who have lived and/or worked in Devon for the previous three years.

Is this the only restriction on buying and selling ex-Council houses?

No. Some houses are subject to other restrictions - ask your solicitor to check.

For example:

  • All ex-Council properties are restricted to use as a main residence and not as a second or holiday home.
  • Rights of pre-emption: these were usually only included in transfers prior to the early 1980s and lasted for 21 years, so they have probably all expired now.
  • Building Plots: the garden of an ex-Council house may be large enough to build a second dwelling on. We consider that building a second house on the plot does not, in itself, breach the 'rural area' covenant. However, both the old and the new property will be subject to all of the covenants applying to the land including the 'main residence' covenant, if applicable. We don't normally agree to the release of such covenants in relation to development land.
  • Covenant preventing alterations: most ex-Council properties have a covenant preventing alterations. The Council is unlikely to object to releasing these covenants unless we have land in the vicinity which can be said to benefit. The person requesting the release must pay our costs.
  • Consent of the Housing Company should be sought separately.

I'm selling a property subject to the restriction - what should I do?

Make sure your Estate Agent includes the rural area restriction in the Property Particulars - reducing the risk of a sale falling through because the Council will not give its consent. Ask your Solicitor to check your Deeds at an early stage to see what restrictions may apply.

What if the property is leasehold?

In the case of a leasehold property, this is really a matter for the Housing Company as owner of the freehold, and the request for consent should be made to them in the first instance. However, the restriction at the Land Registry is specifically in the Council's name, and the Registry will insist on specific consent from the Council as well. In practice, if the Housing Company consents to the transfer of a leasehold property, the Council will consent as a matter of course.

I am having problems selling my ex-council house because of the restriction - what can I do?

It is likely that the restriction will reduce the value of the property. The restriction would have been taken into account in the price paid when the property was first sold, and initial and any subsequent purchasers would have been fully aware of the restriction when they bought the property.