The law of restrictive covenants is a complex area and a mystery to many landowners, some of whom believe that restrictive covenants cannot be challenged, however, this is not the case.
Restrictive covenants affecting land arise out of an agreement that one party will restrict the use of its land in some way for the benefit of another’s land. The restrictive covenant is capable of being enforceable by one party’s successors in title against the other’s successors in title, as well as between the original contracting parties. Therefore, if your property is subject to a restrictive covenant and you wish to modify or develop it, you may discover that you are prevented from doing so if the covenant remains on the title.
Checking the title deeds to your property will quickly reveal whether there is a valid restrictive covenant which affects the land. If you find that your property is affected by a restrictive covenant, you should firstly consider whether indemnity insurance is available in order to provide you with protection in the event that someone with the benefit of the covenant takes legal action against you for breaching the covenant. If insurance is not available then you should try and identify the owners of the land which benefits from the covenant and try to reach a compromise with them which will usually involve the payment of money for the release of the covenant. If neither of the above are possible, then an application can be made to the Lands Tribunal seeking an order, which wholly or partially discharges or modifies the restriction.
The most common grounds for the Lands Tribunal agreeing to discharge or modify the restriction are that the restriction is obsolete due to the change in the nature of the neighbourhood since the time it was originally imposed, or that the restriction prevents the reasonable use of the property and modification would not result in those entitled to the benefit of the covenant losing something which provided a practical benefit of substantial value, and, money would be an adequate compensation for any loss suffered.
An application to the Lands Tribunal is a lengthy process sometimes taking in excess of 2 years and can prove to be very costly. Also, the result of an application to the Lands Tribunal is by no means certain, there is a great deal of discretion given to the Lands Tribunal to assess what they believe to be a practical benefit of substantial value.
An applicant will need to instruct an expert to report on whether the person entitled to the covenant would loose any practical benefit of substantial value. It is the expert’s responsibility to calculate any decrease in value which the proposed development might have on the land entitled to the benefit of the restrictive covenant.
Communication and negotiation are key in these situations, it is important to approach those with the benefit of the covenant and try to reach some sort of compromise. Providing them with a copy of the expert report is a good starting point. This may reassure the objector that they have nothing to fear in loosing the benefit of the covenant. If a compromise cannot be reached in the early stages and an application to the Lands Tribunal is made, negotiations between parties can continue right up to the final moments. Trial should be the absolute last resort for all parties concerned.
Compensation resulting from the removal or modification of a restrictive covenant is based upon the reduction in value of the property that had the benefit of the restrictive covenant.
It is also left to the Lands Tribunal to decide who pays the costs of the proceedings, more often than not the applicant will usually end up paying the costs of those who benefit from the covenant, whatever the outcome.
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 £1,000.00 – £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.
We live on a plot of land containing 7 detached dwellings. A restrictive covenant states that no more houses can be built. The benefit has been passed to the HCA. If any of us wish to build a house at the bottom of our reasonably substantial gardens a) could our neighbours be regarded as beneficiaries and b) can any one of us apply to the HCA to lift our own restriction?
we have a covenant on our property, saying no more than 3 houses can be built, there is already 4 propertys, and we want to demolish our double garage, and erect another house in its place, my question is. has the covenant been broken because there is already 1 more property than the covenant states, which will enable us to build
Hi,
I purchased a property where with a similar entry on the title deeds as below. I was advised by my solicitor that this would be no problem provided I had indemnity insurance which I now have. However I get the feeling that I will not be able to get a mortgage on the property. The restrictive convenant is dated from 1930 and is between the builder and the orginial seller of the land. Interestingly the two a joining properties have the same names in a restrictive convenant, but specify exactly the restrictions.
Is there anything I can do apart from having an indemnity insurance, and will this make the property impossible to sell.
Thanks
1.” A Conveyance dated 10 September 1970 made between (1) Mary Stamper and (2) Northern Gas Board contains restrictive covenants but neither the original deed nor a certified copy or examined abstract thereof was produced on first registration.”
My parents purchased my house on the 26/09/1984 and I subsequently bought it from them in 1992. Neighbouring woodland with engineering workshops were purchased on the 09/11/1983. Their is a restrictive covenant to use the woodland for farming or agricultural purposes only. The then owner ( now deceased) obtained a deed of release from the developer on the 17/08/1984 to develop a single dwelling house . However he did not obtain a deed of release from another property owner nearby who purchased his property in March 1984. With this in mind am I correct in thinking that ,as the restrictive covenant had not been fully extinguished before my parents purchased their property on the 26/09/1984, then it is still enforceable by myself as I still have the benefit of the covenant ?, many thanks, Mark.
Dear Meenu
Thank you for your comment.
To establish if you can develop and extend the land in the way that you plan it is essential to establish if the covenants in question are enforceable. Unfortunately, without further investigation, I am unable to offer any firm advice as to whether the restrictive covenants described are in fact enforceable. In regards to the vendor company, I am unable to comment until I have had the opportunity to fully review all documentation relating to this matter.
It important to note that if the restrictive covenants you describe above are found to be enforceable, and you breach the covenant, the land owner who benefits from the covenant may be able to obtain one of the following remedies:-
1. An Injunction: This could be used to prevent a breach of the covenant by preventing you from behaving in a way that would undermine the terms of the covenant.
2. Damages: This would seek to compensate the other land owner for their loss incurred as a result of your breach.
To avoid these difficulties you may want to consider securing the removal of the restriction. There are a number of different ways that this could be achieved:-
1. You could consider negotiating with the benefiting land owner to secure the release from the obligations under the covenant;
2. You could look to obtain restrictive covenant indemnity insurance to protect against the risk of the covenants being enforced; or
3. You could consider submitting an application to the Lands Tribunal to have the covenant modified or discharged.
If we can of further assistance or if you would like us to consider the documentation referred to above, please do not hesitate to contact us on 01772 258321.
Kind regards
Beccy Hayles
Hello,
I would like to convert a detached garage into a granny flat but a covenant from 1922 states that only one dwelling is to be built on the original land. Would this stop me from going ahead as all of the beneficiaries of the covenant died 70 years ago and the area around has been completely developed.
Many thanks
David
Dear Neil
Thank you for your comment.
The first thing to check is whether or not the covenant is enforceable. If the land with the benefit of the covenant has changed hands since the covenant was originally made the covenant may be unenforceable if it does not meet certain conditions. The wording of the covenant itself will determine whether or not it remains enforceable and I cannot advise you further without carrying out further investigations.
It important to note that if the restrictive covenant you describe above is found to be enforceable, and you breach the covenant, the land owner who benefits from the covenant may be able to obtain one of the following remedies:-
– An Injunction: This could be used to prevent a breach of the covenant by preventing you from behaving in a way that would undermine the terms of the covenant.
– Damages: This would seek to compensate the other land owner for their loss incurred as a result of your breach.
If the covenant is found to be enforceable, there are options that you could consider to secure the removal of the covenant. Firstly, you could agree with the other land owner to the express release or variation of the covenant via a Deed of Release. Alternatively, in the situation of disagreement, you may apply to the Upper Lands Tribunal to apply for the covenant to be removed. The latter will invariably cost you in terms of application fees and time.
If we can be of further assistance please do not hesitate to get in touch with our Litigation team on 01772 258321.
Kind Regards
Beccy Hayles
Hi can you advise if existing restrictive covenant that states “Not to erect upon the property herby conveyed any additional dwellinghouse or dwellinghouses or any other building whatsoever other than a domestic greenhouse or domestic outbuilding of character appropriate to the property” would be enforceable if the existing obsolete building was converted? As we are not erecting a new dwelling.
Thank you
Jan
We successfully applied for change of use and have converted an existing commercial building into a house for our use.
There is a restrictive covenant “not to erect upon the property herby conveyed any additional dwellinghouse or dwellinghouses or any other building whatsover other than a domestic greenhouse or domestic outbuildings of charactor
appropriate to the property”.
The existing commercial building has remained empty for 13 years and we have only carried out internal refurbishment works ie: rewire, plumbing decoration etc.
We explained that we have not ‘erected a dwellinghouse’ but converted an existing redundant, obsolete building
The beneficiary’s do not own land adjoining our property.
The holders and beneficiary’s of the restrictive covenant demanding a substantial payment for compensation and offering to sell us the restrictive covenant as part of the settlement
Your help and advise would be much appreciated.
Regards,
Jan
Hello,
I have question regarding restrictive covenant. We are in process of buying home build in 1956, we found out that the house we are want to buy has following restrictions:
1) In the documents for the property it states that “the purchaser will not erect any additional building on the property or make any alteration in or addition to the roof wall timbers or elevation of dwelling house or the yard or garden walls or fence therefore without the previous licence in writing of the Vendor and it successor in title “ ?
what does it mean?
2) The purchaser will bear and pay such proportionate part as may be determined by Local or other appropriate authority of the cost of maintaining and repairing any dam sewer watercourse pipe cable or wire used by the Purchaser in common with the owners or other land forming part of the estate owners or occupiers of any other land forming part of estate.
3) The purchaser will not use the garden ground on the property transferred for any purpose other than as a private garden.
4) The Purchaser will not do or permit to be done any act or thing in or about the property transferred which shall or may be or grow to the annoyance nuisance damage or disturbance of the Vendor or the owner or occupier of any part of the Estate.
Our solicitor says the Vendor company is not in business as it very old so your restriction covenant is no longer valid and obsolete. But the company which is mentioned in the land registry, I can find the same name company got registered in 2000 not in in 1956, does this mean it is the same company?
We are only buying that house because there is a scope to extend , But I am not sure about the validity of our covenant.
We asked our solicitor to bring convenant removal letter. I am not sure how difficult it will be
Can you please advise ? what should we do ?
Many Thanks in advance,
Thanks,
Meenu