What Is Restrictive Covenant on Property & How to Enforce It?
Looking at what a restrioctive covenant is, and how to sell with one
Whilst you may be a homeowner, that does not necessarily mean that you have free run to do what you wish with your home. Restrictive covenants property can prevent you from doing certain things to either a piece of land or property, whether that's an extension to your property or keeping livestock in your garden.
In this blog post, we will be looking at removing restrictive covenants, how restrictive covenants land and property, and how to sell with a restrictive covenant.
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What is a restrictive covenant on a property?
Restrictive covenants meaning is a binding condition that is written into a property deed or contract by a seller in order to determine what a homeowner either can or cannot do in regards to their house or land under particular circumstances. They cover a broad range of home ownership issues, but the most common types tend to revolve around preventing the following:
buildings or other substantial structures from being erected on a section of land
trades or businesses from operating on the land
owners from making alterations to property
Why are they used?
These covenants are used in order to uphold certain standards for all residents. They are often added to Transfer Deeds by housing developers and property management companies to prevent owners from having work done to their property which may impact the neighbourhood negatively. This can be covenants such as preventing the fixture of security cameras on a property or a ban on livestock being kept in front gardens.
What is an example of a restrictive covenant?
There are many different types of restrictive covenants that homeowners can have taken out on their property. Below are some examples of restrictive covenants property that can be applied:
Building above a specific height
Building above a specified number of dwellings
Banning pets or livestock
Disallowing certain types of businesses to use the property or land
Banning access to certain parts of the property or land
Ban on outbuildings, sheds, hot tubs, swimming pools
Disallowing the use of the property for Airbnb, holiday home, serviced accommodation, or right-to-rent purposes
Satellite dishes, solar panels, and CCTV camera bans
Limits on the number of types of vehicles allowed on attached land
Limits on the presence of caravans or temporary housing
Controls on the number of occupiers
Limits on activities deemed to be "anti-social"
Are there positive covenants?
Whilst it is easy to view restrictive covenants as a nuisance, there are certain covenants that can be viewed in a positive light. Postive covenants also aim to keep a sense of uniformity in the neighbourhood and are also there to keep property values intact and disputes to a limit.
Some examples of positive covenants can include:
Using certain styles of windows and doors
Using a certain style of masonry such as traditional stone or reclaimed bricks from a certain period
Painting external parts of the property
Garden maintenance obligations (regularly mowing lawns, cutting down excess vegetation, weeds, landscaping, fencing)
Payment for works after successful planning consent/change of use application
It is worth bearing in mind that both positive and negative restrictions can apply to new build, older properties, listed buildings and those that are located in conservation areas.
Do new builds come with restrictive covenants?
Yes, they can, although not every new build will. Restrictive covenants can be added to any property regardless of age. However, often older covenants can be dismissed as unenforceable. This can be because the original landowner cannot be traced, it is historically obsolete, or the wording is too ambiguous.
How does a restrictive covenant affect homeowners?
Restrictive covenants run with the land, meaning that they are not just applicable to you as the current homeowner, they will also apply to any future homeowners as well. So if you are considering purchasing a property you should instruct your conveyancing solicitor to look through the property deals and alert you to any restrictive covenants that may come with the property. It is critical that you are aware of any covenants before you sign as once the title deeds are signed, you will be responsible for any breaches that occur, accidental or otherwise.
You should also be careful to check where the 'benefit of covenant' resides, which is usually with the current homeowner. Whoever is in possession will be responsible for enforcing any covenants.
You should also consider how the covenant will affect the potential sale of the property. If it is a covenant on building works or extension, then lenders may not be willing to lend due to its impact on future salability.
What do I do if my solicitor missed a restrictive covenant?
When purchasing a property, it is the job of your solicitor to inform you of any restrictive covenant that may be in place. As a result of this, should you inadvertently breach a restrictive covenant or come across one that you were not informed about, then you would be able to complain to the Legal Ombudsman.
However, you should bear in mind that the most the Legal Ombudsman can award you in compensation is £50,000, which may not be enough to cover the costs you incur depending on the covenant.
Breach of a restrictive covenant
Whether you breach a covenant knowingly or unknowingly, you may be forced to undo any work you have originally done, pay a fine, or potentially face legal action. If you have breached a covenant without challenge for over 12 months, then you may be able to take out restrictive covenant insurance to protect any work that you have had done.
How enforceable are restrictive covenants on property?
Restrictive covenants can be enforced by whichever party has the benefit of the covenant. In order for the covenant to be enforced the covenant may not:
Unclear or ambiguous with its wording
Contrary to public policy
Against competition law
Unclear or ambiguous
Should you be aware of a breach of covenant, you should inform the benefit of the covenant and ask them to rectify the issue.
How to enforce a restrictive covenant when selling my home?
If you are selling a property and have breached a restrictive covenant you should seek legal advice as soon as possible. This is because issues surrounding a breached covenant can get technical so it is best always to consult a professional.
As the conveyancing process progresses, your conveyancing solicitor will check the land charges register to ensure that the relevant covenants are recorded. After checking the likelihood of the covenant being enforced, your conveyancer may check to see what insurance can be obtained in order to cover the liability of further breach of contract.
As we have previously mentioned, if the breach has occurred more than 12 months ago without objection, then restrictive covenant indemnity insurance can be obtained. But after this insurance has been obtained by the homeowner, it will last in perpetuity and will be passed on to future owners of the property.
Can a neighbour enforce a restrictive covenant?
If a neighbour threatens to breach a binding covenant, then the majority of solicitors would advise you to obtain an injunction. This injunction would allow for any further work to immediately stop, as well as ruling for demolition or revert the property back to its original state depending on the case.
In the event that the neighbour ignores the covenant, then they may face a claim in compensatory damages for breach of contract. This will reflect in loss in value of the land caused by the breach in addition to a range of associated costs.
Can you remove restrictive covenants from a property?
When it comes to removing restrictive covenants, if it meets a certain criteria, then you may be able to apply to the Upper Tribunal to have it removed from the property.
If you have not managed to obtain an insurance policy, then as the homeowner you may want to approach the person who has benefit of covenant and obtain 'retrospective consent' for the offending work. If you are unable to find this person, they refuse permission, they seek compensation for the breach or charge a fee, then you can apply to the Lands Chamber of the Upper Tribunal in order to modify or discharge restrictive covenants.
However, if this is an avenue that you are thinking about exploring, it is worth noting that it can be costly and time-consuming to go through the tribunal and you may not be successful. And if you do win your bid, then you will need to pay your own costs and if the benefactories objection is successful, you will pay their costs.
How to find if you have restrictive covenants on your property
If you are wondering whether you have restrictive covenants property, you are able to look in the Deeds for the property or Section C of the Title Register. You are able to find Section C by downloading it for £3 from the HM Land Registry.
If your property has a number of covenants on the property, then you may find there is an attached document that accompanies the Deed. On occasion, HM Land Registry will hold more details of the covenant.
If this does not reveal the answers you are looking for, you may have to instruct your conveyancing solicitor to obtain evidence of historical conveyances to determine which covenants are still enforceable.
Sell to us
Whilst selling restrictive covenant on property can be difficult, it doesn't need to be. Here at The Property Buying Company, we make selling easy. That's because we are a genuine cash buyer who specialises in fast house sales in a timescale that suits you. We buy any house, in any condition, and in any location, even with a restrictive covenant in place.
We tailor our sell house fast service to suit you. As we are a genuine cash buyer we have the funds available to purchase your home as soon as you are ready to sell. Whether that's in as little as 7 days or as far away as 6 months time, we are ready when you are.
We are also proud members of The Property Ombudsman and The National Association of Property Buyers, as well as having an excellent rating on TrustPilot.
Plus we will cover all of the legal fees that you would typically associate with selling your home, it's just one of the ways we take the stress out of selling.
If you are ready to sell with covenants on property, get in touch today by filling in one of our free no obligation valuation to receive your CASH offer, which we could have in your bank in as little as 7 days...