A restrictive covenant affecting freehold land usually restricts the use of its land in some way for the benefit of another’s land.
There are generally two types of covenant affecting land. A positive covenant, generally, imposes an obligation to carry out some positive action in relation to land or requires expenditure of money. In contrast, a restrictive covenant restricts the use and enjoyment of the land.
The distinction between restrictive or negative covenants and positive ones is important. That’s because the burden (the obligation to observe a covenant) does not generally bind successors in title where a covenant is positive in nature, but it may do so if the covenant is negative.
How are restrictive covenants used?
There are a number of ways that restrictive covenants may be used. These include:
- Limiting possible uses of the land, for example, to residential purposes only
- Prohibiting particular trades or businesses
- Forbidding undesirable activities or potential nuisances
- Restricting the number or type of buildings that can be erected
- Restricting the height of buildings
Examples of positive covenants on the other hand may include those requiring:
- Expenditure of money
- Works of repair or maintenance
- Erection of buildings or boundary fences
- Payment of further money on planning consent being granted
The meaning and effect of a covenant must be carefully considered to see if it is genuinely negative in nature as many covenants can be found expressed in ambiguous terms.
When is a restrictive covenant not enforceable?
A restrictive covenant will generally be enforceable between the original contracting parties as a matter of contract. There can be situations where this is not so, for example, where:
- The covenant is too uncertain or ambiguous to be capable of enforcement
- The covenant is prohibited by competition law and is unenforceable
- The covenant is contrary to public policy, for example, it contravenes equality laws
- The covenantee assigned the benefit of the covenant to a third party
Where the person seeking to enforce the covenant and the owner of the burdened land are successors in title to the original contracting parties, there are several pre-conditions that must be met for the covenant to be enforceable.
When is a restrictive covenant enforceable between successors in title?
For the covenant to be enforceable between the successors in title to the original parties the following rules for the passing of the benefit and the burden of the restrictive covenant must be complied with:
- The covenant benefits land owned by the person seeking to enforce it
The covenant must “touch and concern” or relate to the land owned by the person seeking to enforce the covenant. It must affect the land and not merely be of personal benefit to the original contracting party. A covenant is deemed to touch and concern land where all of the following apply:
- The covenant benefits only the owner for the time being of the land and if separated from the land ceases to be of benefit.
- The covenant affects the nature; quality; mode of user; or value of the land
- The covenant is not expressed to be personal
The covenant must actually benefit or preserve the value of the land. The courts assume that a covenant is capable of benefiting particular land for which the covenant was imposed unless it can be proved otherwise.
- The person seeking to enforce the covenant owns the benefiting land
The person seeking to enforce the covenant must either be the legal owner or a person with some lesser interest that is recognised in equity. For example:
- A person who has contracted to buy the freehold
- A beneficiary under a will
- A trustee in bankruptcy
- The benefit of the covenant has passed to the person seeking to enforce it
The benefit can pass in one of three ways:
- Annexation
- Assignment
- Scheme of development
It is also important to consider the application of Competition Act 1998 and Land Agreements Exclusion Order as certain restrictive covenants are prohibited and will be unenforceable.
Although the benefit of a restrictive covenant can pass at common law, the burden of a restrictive covenant cannot. However, the law of equity developed to allow the burden of a restrictive covenant to be enforceable against successors in title in certain circumstances.
How do I challenge a restrictive covenant?
There are a number of ways of challenging a restrictive covenant.
Express release: It may be possible to negotiate the release or variation of a restrictive covenant.
Indemnity insurance: It is possible to obtain indemnity insurance to protect against the risk of a person with the benefit of a restrictive covenant seeking to enforce it. Usually, the cover is for an indefinite period, at a one-off premium and also covers successors in title and mortgagees of the policy holder. However, if there is a proposed change of use or planning application it may not be possible to obtain cover for the new use/development until the consent has been granted and no objections relating to the restrictive covenant have been raised.
Upper Tribunal (Lands Chamber): If agreement cannot be reached with the beneficiaries of a restrictive covenant, or if insurance is not available, an application can be made to the Upper Tribunal (Lands Chamber), formally the Lands Tribunal, for the modification or discharge of a restrictive covenant. An application to the Upper Tribunal is often a lengthy and costly process. If no objections are raised, an application can take three months but much longer in a disputed case. The Upper Tribunal has power to order the applicant to pay compensation to the person entitled to the benefit of the covenant. The Upper Tribunal can discharge or modify the restriction if satisfied that one of the following grounds applies:
- The covenant is obsolete
- The covenant impedes some reasonable use of the land
- The beneficiaries expressly or impliedly agreed
- No injury will be caused by the modification/discharge
Applications/releases pursuant to statute: It may be possible to utilise the provisions of the Housing Act 1985 or the Competition Act 1998.
Civil Procedure Rules (CPR): In challenging the covenant there is also the option of court proceedings under section 8 of the CPR for declaratory relief, although most parties will go through the Lands Tribunal process.
As always it’s important to seek specialist legal advice at the earliest opportunity to best protect your interests.
Restrictive Covenant Report
If you have a restrictive covenant which may affect your freehold land, our property litigation team can consider your circumstances, by way of written report. The written report will set out our advice and identify a strategy to achieve your objectives moving forward on the basis of our advice.
Our report will consider all the circumstances giving rise to your query, undertake a full review of all relevant documentation and apply the information gleaned from this review to the appropriate legal provisions. We estimate our fees to prepare our Restrictive Covenant Report will be in the region of £1,000 – £1,500 plus VAT and disbursements. Please be aware that cost estimates are provided to give you an idea of the likely costs involved only and costs will vary depending upon the level of papers and complexity involved.
For more information on our Restrictive Covenant Report, please contact a member of our team on 01772 258321.
If a covenant was breached some years ago and it has not been spotted, can it then be enforced at a later date?
Dear R Clough
Covenants run for different periods of time, dependent on whether they are positive or negative in nature. The usual course of practice with new enquiries of this nature is to provide you with some substantive initial advice on the restrictive covenants in place, in particular, advise on the enforceability of restrictive covenants.
However, in order to do so, we would need to review all title deeds and any other documentation that may be relevant. The law in the area of enforceability of restrictive covenants is often fact specific, we therefore will need to have sight of all relevant documents you have in order to advise further on these issues.
I am sorry that I cannot be of more help. If you have any questions, or would like us to review your papers and provide more substantive advice, please do not hesitate to contact me by email at dulcimer.mclaughlin@harrison-drury.com or on 01772 258 321.
Many Thanks
No, unfortunately, not if there was merger of the titles because it would remove the covenant as the benefit and burden cannot held in the same estate
Our estate (built in the 50’s) has a number of covenants, mostly on what the developers were allowed to build; but one of them states that the residences should be used as ‘family dwelling houses’ . A neighbouring house has been sold and the new company owners have had a change of use application approved, which is to use the premises for a care home for children plus non-resident adult carers. Is it prohibited therefore to use the house as a business employing staff, and if so how do I go about enforcing the covenant?
Hi,
My property deeds date back to 1996. Within the restrictions there is a covenant stating ‘Not to use the property except as a single private dwelling and in particular not to catty on any form of trade or business. Our original neighbours have sold to people who are utilising the ground floor of their property as a nursery and are employing staff to look after the children. The rear garden backs onto our property which results in noise issues. We’re looking to sell in the next couple of years and are worried that the nursery will put off prospective purchasers. Could you tell me whether we have any rights? Thank you.
We have been granted a transfer of land at the rear of our property. There is a restrictive covenant not to erect a fence on the front or side elevation of the property without prior consent. As it is at the rear we erected a wooden fence which is the same as the rest of the estate. The neighbours who are not adjoining the perimeters but are facing the property from the other side of the road and Barratts have now said we have to remove it and replace with a iron wrought fence. we are having problems with anti social behaviour and youths gathering in the immediate proximity and therefore a wrought iron fence would not be sufficient to stop stones being thrown on to my car can I argue the lease which states “permission not to be unreasonably witheld ” is it worth me fighting this covenant or should I just take down the fence and let the land go back to meadow ?
The next door built an extension with a wood burning stove built in. This has been a permanent menace and smoke comes across and we have fought this for a few year. The council and environmental health are poor and shelve responsibilities. I recently obtained there land registry which has a number of restrictive covenants on including.
Not to make any addition or structural alteration to the said dwelling house nor to erect any other building or structure upon the property hereby assigned without the previous written consent of the lessor such consent not to be unreasonably withheld in any case where such addition alteration or erection will not in the opinion of the lessor adversely affect the amenity of any adjoining site or detract from good appearance of the vendors building estate and where the purchaser has obtained any consent or approval required by statue and to pay the lessor any expense incurred by the lessor in or about the granting of such consent..
Could I take on my neighbour, as there stove flue looks hideous and I have loss of amenity? This has made our lives sad for years. Could I enforce this covernant.
I’ve recently bought a new build property that has a restrictive covenant that states no one should park in the turning space.
The house is less than 3 months old, the builders are still on site but a neighbour is constantly allowing their visitors (and themselves at times) to park in this turning space. This space has been designed for the neighbours in the cul-de-sac to turn into their drives and is also there for emergency vehicles and refuse trucks if (and when) they need to visit.
I have asked (and so has another neighbour) asked the builders to enforce the restrictive covenant but as yet no progress has been made. What should I do?
Dear Denise,
Thank you for your email.
Just because the deeds cannot be located or they have been destroyed does not mean that the restrictive covenants within them are unenforceable. The deeds could be found at any time, or extrinsic evidence could be produced which indicates what the covenant is.
There are a couple of options available to you in this situation. It may be that the covenant holder would agree to enter into a deed of release and therefore release the property from the covenants.
If a release cannot be agreed then an application to the Upper Tribunal (Lands Chamber) may be appropriate. They will make a decision as to the modification of the covenant. However, by virtue of S.84 LPA 1925, in order to make such an application, you will need to show that either of the following four situations exist:
1. Either the covenant is obsolete
2. It impedes some reasonable use of the land
3. The beneficiaries expressly or impliedly agree
4. No injury will be caused by the removal or amendment
There are a number of ways to deal with restrictive covenants, including indemnity insurance.
If you would like to discuss these options further then please do not hesitate to contact our Property and Construction team on 01772 258321.
Kind regards
Emily Leeming
Good Evening, Land registry states that there is a restrictive covenant on our property dating back to 1968 but do not have a copy as it was destroyed by fire. We have contacted the other party to the covenant who also are uunable to locate a property. Would this mean that any restrictions on the covenant are unenforceable? Many thanks
Denise
Dear Rod
Thank you for your email.
Before being in a position to provide you with any definitive advice, I would need to undertake a review of the title deeds to the property in order to assess whether the covenant is still enforceable.
However, in light of the the information you have already provided and to avoid delay in the sale of the property, it is likely that the best way forward here may be to obtain indemnity insurance to protect you/your successors in title against any enforcement action that may be taken by National Trust in respect of the breach of covenant. The solicitor acting on your behalf in relation to the sale of the property should be able to advise you further in this regard.
I hope this information is of assistance to you. If you would like to discuss your query further then please do not hesitate to contact our Property and Construction team on 01772 258321.
Kind regards
Beccy Patience