connect

Connecting North West business to relevant training, insight, conversation and each other

Guide to restrictive covenants

You may be interested in, or in the process of, purchasing a property which is affected by restrictive covenants.  Covenants can affect your current and future use of a property.  When purchasing a property, your lawyer will provide you with full details of any restrictive covenants and it is extremely important that you understand the effect of these and ensure that they fit with your expected use of the property.

What is a restrictive covenant?
A restrictive covenant is a restriction on the use of land or property.  The details are set out on the legal title to the property.  Examples of restrictive covenants can include, not to erect any structures or buildings on the land, or not to use the land for business purposes.  A common form of restriction can also include not making any further alterations or additions to the property without the consent of the original developer.

How will the restrictive covenants affect me?
A specialist conveyancing lawyer, will draw your attention to specific restrictive covenants which affect the property, and ensure that you are aware of what you can and cannot do, in relation to the property.  You may wish to alter your property or develop the land in the future, which may be in direct breach of a restrictive covenant.  You will need to discuss your future plans in relation to the property with your lawyer, in order to ensure that you are able to deal with the property in the way you want.

What will happen if I breach the covenant?
Do not go ahead and breach the terms of the covenant, as someone with the benefit of the covenant could apply to the courts to have any threatened breach stopped by an injunction, and/or, they can claim damages.  Planning permission will not override the covenant and the planning authority will not consider private legal rights between parties when consider granting permission.

How do I overcome a restrictive covenant?
If you discover that there is a restrictive covenant in place which stops you from dealing with the property as you would like, what can you do about it?

  • Firstly, find out who has the benefit of the covenant.  Anyone who owns any part of the land affected by the covenant will be able to enforce the covenant, provided they can show that the covenant benefits or preserves the value of their land
  • Try to negotiate the release or variation of the restrictive covenant.  This will only be effective if the full extent of the land that benefits from the restrictive covenant can be located and all of the beneficiaries identified
  • The beneficiaries may require a payment in order to agree to release or vary the covenant
  • If the beneficiaries cannot be located, then it is possible to obtain indemnity insurance to protect against the risk of a person or company with the benefit of a restrictive covenant seeking to enforce it
  • If the above options are not available, then an application can be made to the Upper Tribunal for the modification or discharge of a restrictive covenant.

If you would like to speak to our Residential Property team regarding this matter, or any other query, please call 0345 6710276 or email relyonus@napthens.co.uk

John Hunter - Napthens Solicitors