Restrictive Covenants …Restrictive What?

What is a restrictive covenant?

A restrictive covenant is a provision in a deed imposing some form of restriction on the use of the property that is the subject of that deed. There is always one party who benefits from the restrictive covenant and one party who must observe it. Restrictive covenants can be found against freehold and leasehold properties.

In the case of properties that are registered at the Land Registry, restrictive covenants affecting a property will either be recited in the Register of Title or the Land Registry will (usually) hold a copy of the deed in which they can be found. In the case of unregistered properties, restrictive covenants can be found in any of the deeds that form the title. Your property lawyer should be able to help you decipher these often archaically worded provisions.

The obligation to observe restrictive covenants passes with the property, meaning that when the burdened property is sold, the restrictive covenant remains in place and the new owner “inherits” the burden.

When purchasing a house, it is important that you are aware of the restrictive covenants and how they will affect your ownership. For example, some properties (particularly on new developments) have restrictive covenants against the parking of commercial vehicles on driveways, while it is not uncommon for older properties to be subject to restrictions against keeping rabbits and pigeons.

What if I breach a restrictive covenant?

If you breach a restrictive covenant, the person with the benefit of the restrictive covenant can demand payment for their retrospective consent to the breach or apply to the court for damages, which could result in you having to pay out a substantial amount in compensation.

The person with the benefit of the restrictive covenant could also seek injunctive relief which would stop you from carrying out work. For example, if the restrictive covenant states that you cannot build on the land and you start building an extension, an injunction would force you to cease all building work. If the building work has already been completed, the court could ultimately order for the extension to be demolished.

It is important to remember though, that if a breach of a restrictive covenant has existed for 20 years or more, without any complaint by the person with the benefit of the restrictive covenant, they will no longer be able to enforce against the breach.

In the event a restrictive covenant has been breached within the last 20 years, an indemnity policy can offer insurance-backed protection against the payment of damages, legal fees, demolishing and rebuilding, or any loss in value of the property. The price of indemnity insurance depends on the value of the property. It is vital however; that you read any indemnity policy in detail, to ensure it meets your demands and needs. There will be certain criteria to satisfy for an indemnity policy to be issued but our conveyers will assist you through this process.

Can a restrictive covenant be removed?

There are several ways in which a restrictive covenant can be removed. The Land Registry will remove a restrictive covenant if there is evidence to show that the person with the benefit of the restrictive covenant and the owner of the benefiting burdened land are the same person. The most common example of this is when a leaseholder purchases the freehold of their property and the Land Registry cancel the leasehold title.

Alternatively, the simplest option is to speak directly with the person with the benefit of the restrictive covenant. If they agree to the removal of the restrictive covenant, a deed of release can be executed by both parties, releasing the property from the burden of the restrictive covenant. They are likely to require payment for this though, including their legal fees.

Failing this, an application can be made to the Lands Chamber of the Upper Tribunal to have the restrictive covenant discharged, however this process can be very lengthy and costly.

Whatever you issue with a restrictive covenant, whether you are purchasing a property that is subject to them, you have committed a breach, or you want to remove a restrictive covenant, our property team can assist. Call the team on 0845 287 0939 or submit your enquiry through our online contact form.