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Five Things Everyone Should Know About Restrictive Covenants

Five Things Everyone Should Know About Restrictive Covenants

When buying a property, one of the advantages of investing in an experienced conveyancing solicitor is that any restrictive covenants appearing on the title will be pointed out to you.

You might be surprised how many people purchasing a property have no idea that restrictive covenants are present in the title deeds.  And ignorance is no excuse as far as a judge is concerned.  Once you have signed on the dotted line, you are bound by any restrictive covenants applicable to your property.

This may mean you have to tear down your new extension or beloved greenhouse if the landowner who benefits from the covenant enforces it.  Breaches of restrictive covenants can be very expensive.

To help you avoid getting into an unpleasant property dispute, here are five things everyone who owns or rents a property should know about restrictive covenants:

  1. What a restrictive covenant is

A restrictive covenant requires the occupier of the land which the covenant applies to (known as the covenantor) not to do the thing specified in the covenant.  Common examples of restrictive covenants include:

  1. Restrictive covenants are tied to the land

Restrictive covenants do not move with the owner when the land is sold; they are tied to the land.  Regardless of whether the purchaser is aware of them, they are bound by the restrictions contained in the covenant.

This can lead to interesting and sometimes ludicrous situations when restrictive covenants have remained in place for many years.  For example, it was reported in The Guardian in 2015 that the owners of at least one Edwardian property in Brighton are prohibited from displaying their washing in, “a lewd and lascivious manner”.  It also reported that in Swindon, many houses have covenants stating that they cannot keep cows, chickens or pigs on their land.  These may have been relevant 130 years ago when Swindon was a railway town.  However, nowadays it seems unreasonable to deny budding ‘Tom and Barbara Good’s’ the opportunity to own a few chooks.

The Lands Chamber of the Upper Tribunal has the power to discharge or to modify a restrictive covenant where the applicant can show that one of the grounds set out in Law of Property Act 1925, s 84 applies.  The most commonly used grounds are that the covenant has become obsolete or it impedes reasonable use or development.  The landowner attempting to dislodge the covenant will usually have to pay compensation.

  1. You can try and negotiate a release from a restrictive covenant

There is nothing to prevent you from attempting to negotiate a release from a restrictive covenant, or at least have it varied.

As with all negotiations, your best starting point is to do some research on the WIFM (What’s In It For Me) for the enforcer of the covenant.  For example, if you can show the original developer that the plans you have for the property would significantly raise the value of the land, they may be willing to sit down at the table with you.

Negotiation will only work if the full extent of the land that benefits from the restrictive covenant can be ascertained and all of the owners of the benefiting land can be identified and located. You should also be prepared to pay some form of compensation to have the covenant varied or removed.

  1. Covenants are often strictly enforced

If you decide to ignore a restrictive covenant, or are unaware that one applies to your land and breach it, it can be enforced against you.  The most common remedies available to the enforcer of a breach of covenant are compensation or injunctions to prevent you from carrying out the action which is in breach.

In some circumstances, the covenant will not be enforced because it is no longer relevant or does not cause loss or nuisance to the person who has the right to impose it.  For example, if you have been keeping chickens on your property in Swindon for 30 years without complaint, then a covenant prohibiting this is likely to be unenforceable.

However, it is imperative that you seek legal advice before breaching a covenant involving changing the exterior of your home or building an extension.  If a restrictive covenant is enforced against you, you could end up thousands of pounds out of pocket.

  1. You can take out indemnity insurance to protect you against a restrictive covenant

There are a number of insurers who offer insurance to cover you against the risk of breaching a restrictive covenant if a solution cannot be found.  For example, if a restrictive covenant requires you to seek the permission of a previous owner before adding an extension to the property and he or she cannot be traced, indemnity insurance is likely to be available if the work has existed unchallenged for at least 12 months.

In summary

Restrictive covenants can be frustrating for property owners.  But it is always advisable to seek professional legal advice before acting in breach.  You could be risking thousands of pounds, years of legal battles and untold stress if a restrictive covenant is enforced against you.

This is one instance where it is better to be safe than sorry.

Hart Reade Solicitors is a full-service law firm with offices in Eastbourne, Hailsham, Polegate and Meads.  We hold a Lexcel accreditation and a Conveyancing Quality accreditation from the Law Society of England and Wales.  To make an appointment with one of our property solicitors, please phone our office on 01323 727 321.

Please note, this article does not constitute legal advice.