What is a restrictive covenant?
It seems odd, but even when you are a ‘homeowner’, there are some things you still cannot do to your property. If there are restrictive covenants attached to your home, it puts some limitations on what you can do to it. We take a look at how they work, why you want to avoid breaching them and what to do if you have.
What is a restrictive covenant?
Restrictive covenants are written into a property’s deeds or contract by a seller, explaining what the owner can or cannot do with the property itself or land. They are ‘binding’ which means they can’t be broken. They can cover a wide range of issues, but the most common include:
- Preventing alterations to a property e.g. building an extension or converting a house into flats
- Preventing buildings or other substantial structures from being built on a section of land
- Preventing trades or businesses from operating on the land or within the property
Why are restrictive covenants used?
Typically, when housing developers and property management companies design housing estates or a series of properties, they want them to be maintained to a certain standard. So, in most cases, the restrictive covenants are there to make sure that residents don’t do anything to the land or properties that would negatively impact the desired look and feel of the estate, or its maintenance.
The covenants can vary, from not allowing people to park caravans and boats on the drive, to preventing livestock or an overgrown garden. Some even restrict the use of security cameras and satellite dishes.
When it comes to land, landowners use restrictive covenants as a form of protection against damage, to protect value, or to simply maintain some control over what happens to their land.
Which type of property do covenants apply to?
Restrictive covenants can be placed on any property, from new builds to older properties. Some people mistakenly believe that if a property is particularly old, the covenant may ‘expire’, but this is not the case and you must always check before going against one.
However, in some cases, very old covenants are considered unenforceable. This is usually because:
- The original landowner or builder cannot be traced
- The wording is unclear and therefore difficult to apply
- The covenant has become historically obsolete
An example of the last point is a dispute raised in 2018 by Hodge Jones & Allen Solicitors. The covenant read:
“No house or other buildings should be erected on the said piece of land except those for use in connection with the adjoining house of the purchaser unless the southern boundary of the said piece of land should have a frontage to a public road or street.”
However, it was written in 1929 and the part of the land which the covenant referring to had been sold on and could no longer be deemed to be associated with the original adjoining house. Also, the southern boundary it referred to could no longer have a public road or street there, because gardens had been created.
This shows that sometimes, restrictive covenants can be outdated and no longer apply.
How do restrictive covenants affect homeowners?
When you are buying a property, make sure your conveyancer looks at the property deeds thoroughly and tells you if they find any covenants. Because once you sign the deeds, these covenants are your responsibility as they are applicable to all purchasers of the property, not just the original one. If you breach a covenant, even if you didn’t know about it, you will be liable.
There’s also something called the ‘benefit of the covenant’ which means the person in charge of upholding the covenant could have changed and be a private company or individual. They are who you will need to talk to about the covenant and they will be responsible for upholding it and challenging any breaches.
Another way you might be affected by a restrictive covenant is related to the value of the property. Mortgage lenders can in fact refuse to lend on properties where a covenant is going to negatively impact the future saleability of the property.
If this happened to you for a property you are looking to purchase, you would need to contact the vendor or ‘successor in title’ and tell them that you cannot proceed with a purchase if they insist upon a covenant. If the vendor believes that a covenant could affect their own ability to sell, they may be tempted to remove the restriction.
What happens if I breach a restrictive covenant?
This will of course depend on the covenant you breach but doing so could mean undoing large projects (such as extensions) because the covenant doesn’t permit them. That’s an expensive and time-consuming project! You might also have to pay a fee or face legal action. That’s why it’s so important that you know what your property deeds say before you go building an extension or planning large-scale changes to your property.
What can I do if I breached a restrictive covenant and I’m selling?
Unfortunately, sometimes a covenant is unknowingly breached. Then, when it comes time to sell the property, the seller realises and has to deal with it before they can proceed. If 12 months has passed since the breach and no one has challenged it, there are special insurance policies that protect the work that’s been done. However, because covenants can get quite complicated, it’s always best to seek legal advice before anything else.
Can I remove a restrictive covenant?
If you discover a restrictive covenant on your property deeds and think it is unreasonable, you can make an application to the Lands Chamber of the Upper Tribunal to have it modified or discharged, but this can cost a lot and take time. In some cases, because the person who benefits from the covenant being in place will face losses from its removal, you may have to pay compensation, plus don’t forget to consider legal fees.
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