You’ve found your perfect property, arranged the mortgage and you are ready to start making your new house into a home. After all, it is yours to do what you want with. Or is it? You could have restrictions buried in your deeds affecting what you can do on your land – also known as restrictive covenants.
What is a restrictive covenant?
Essentially, a restrictive covenant is a private agreement, or promise, not to do something in relation to the use of land, such as a restriction on alterations or use. These types of covenants ‘run with the land’, so any future occupiers or owners are bound by the restriction.
They are designed to give a person some level of control over a property that does not belong to them.
Common examples include modifications to buildings, agreements not to erect any structures on the land, not using the land to run a business without the developer’s permission or keeping animals (which can even include domestic pets).
Stranger examples include housing developments where residents are subject to a covenant banning them having pets, erecting satellite TV dishes or even from hanging their washing outside the house which was the case for the owners of an Edwardian property in Brighton and Hove.
One of the most frequently broken covenants is altering or adding to existing buildings, without obtaining the written consent of a named third party. Many people will build on ‘their land’ without knowing or remembering that a restriction exists, and assume that planning permission is sufficient to cover this…it isn’t.
This can then create problems further down the line for both buyers and sellers, when it is time to move on and to sell the property. It is not unknown for a bank to value a property in order to offer a mortgage but withdraw the offer when it turns out that part of the property might need to be demolished if a covenant against it is enforced causing a transaction to fall through.
Are restrictive covenants enforceable?
Generally, a restrictive covenant will be enforceable between the original parties as a matter of contract, and by successors in title to the original parties but there are a few ways that they can potentially be resolved.
The first point of call would be to contact a solicitor to see if the covenant is still valid, and if the wording does affect the proposed use of the land. A covenant could be found to be unenforceable if it is ambiguous in its language or if it is contrary to any competition or discrimination laws for example.
If the covenant is found to be valid and enforceable it can still be dealt with in a number of ways which include:
- An application to the Lands Tribunal to have the covenant modified or discharged
- Obtaining a Court declaration as to the enforceability of the covenant
- Indemnity insurance against breach
- A deed of release from the person entitled to the benefit
It is essential to bear in mind that taking one approach might not work and that could then prevent you from trying another approach. Therefore extreme care needs to be taken to decide which approach is best in the circumstances. For example, if you speak to the person with the benefit of the covenant about the issue you wouldn’t be able to subsequently obtain indemnity insurance against breach. The law relating to restrictive covenants is extremely complex. Restrictive covenants can never be overlooked on a purchase of property, particularly where you have plans to develop land or alter a property or its use.
To speak to a specialist property solicitor about restrictive covenants please call 0845 287 0939 or submit your enquiry online.