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Restrictive Covenants and the Development of Land

It is often wrongly assumed that the grant of planning permission removes any further barriers from development progress. One must also consider the impact of any restrictive covenants on the land. Which may exist outside the realm of planning law and in the more intricate aspects of private land law.

Even if planning permission is granted, which is to say the local authority have merely validated the application for development and approved it having conducted their consultations. They will not necessarily be aware of any private restrictions that may exist on the owner’s title to the land. Indeed, a valid and enforceable restrictive covenant may inhibit any further progress to development. Or, in certain cases, completely remove the option for development entirely.

What is a restrictive covenant?

In it’s most basic sense, a “covenant” is a legal promise given by one party to another. A restrictive covenant in land applies to the land itself. And continues to bind the land indefinitely until it is released, discharged or modified.

For example, a landowner may decide to sell off part of their land to a third party. As part of the original sale, the landowner may require certain restrictions to be placed on the land which is to be sold. A common example is restrictions on certain types of development or alteration to the land. In order to acquire the land, the buyer must then accept that a covenant will be placed on their land. They will then be unable to carry out development or alteration, either entirely, or, in some cases, without the prior consent of the adjoining landowner who sold them the land. This covenant will bind successors in title to the land upon any future sale.

Remember: the covenant binds the land, not the landowner.

Can it really stop me building or developing on my own land?

Yes, it can.

Even though planning permission has been granted, it does not override any restrictive covenants. The two are not mutually exclusive, they are entirely independent of one another.

Any prudent developer should investigate title before the commit to the planning process.

Is there a way around this?

Yes, there is.

Whilst planning permission does not override a restrictive covenant, it’s existence can be used as a negotiating tool with the adjacent landowner. Particularly if you simply require their consent. If you can show that proper attention has been given to the proposed development (which is apparent from the planning documents). The benefiting landowner may only be too pleased to give their consent. However, this may not apply if there is an outright prohibition on development.

What are my other options?

There are several ways to deal with the issue of a restrictive covenant which may otherwise impede development of land:

You should be aware that an indemnity policy merely insures against the risk of the breach being discovered. It does not remove the covenant or the breach itself.

Caveats

There will also be many caveats attached the policy. For example, it is unlikely that the risk can be insured against if you have already approached the landowner and asked for a release, or if they are aware of the development.

That said, an indemnity policy is sometimes the preferred solution if the covenant is incredibly old and there is no past knowledge of the covenant being enforced previously. Equally, if you are unable to establish from investigations of your own title (and surrounding titles), the land which has the benefit of the covenant, then an indemnity policy may be more suitable.

Hart Reade Solicitors are a full-service law firm with offices in  Eastbourne, Hailsham, Polegate and Meads.  We hold both Lexcel and Conveyancing Quality Accreditation from the Law Society of England and Wales, as well as being an ALEP member.  To make an appointment with one of our commercial property Solicitors, please phone our office on 01323 727 321.

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