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.
When does a covenant become obsolete? I have a freehold property which is part of a converted school. It was developed in the eighties into residential and offices. The front communal area where I have front door access is under a covenant. For thirty years the residents have cared for the gardens and never paid or been asked to pay maintenance of the grounds. Recently we have all received bills for garden maintenance. Will the covenant have lapsed or is it still enforceable?
Hi Anita
Thanks for your comment. I sent an email to reply to you but unfortunately it was returned undelivered. Please can you email me at jody.proudman@harrison-drury.com so that I can come back to you?
Many thanks
Jody
I want to buy land but it comes with this restrictive covenant:
“(a) that he will not at any time hereafter erect build or place or permit to be erected built or placed on the land hereby transferred or any part thereof any building or other structure or erection whether permanent or temporary”
Does this mean we can never build on the land? Can this covenant be overturned?
Hi Dean
It’s difficult to be sure what effect that covenant has without seeing the deed containing it. Generally speaking, an application can be made to the Upper Chamber (Lands Tribunal) seeking the modification or discharge of a restrictive covenant under section 84 of the Law of Property Act 1925 on the basis of a number of stipulated legal grounds, as detailed in our article above.
We’d be happy to give you some specific advice in relation to your covenant if you’d like to email details to Jody Proudman in our Property Litigation team at jody.proudman@harrison-drury.com.
I believed my neighbour had entirely inherited a 25 year old restrictive covenant on my property when he purchased his property several years ago. We both want to develop some buildings that I own but which are restricted under this covenant. However, he did not purchase all of the land that benefits from this covenant. He did acquire most of it and this portion is physically adjacent to my land. The original title deed to which the coventant is attached still exists but this is now physically smaller and not adjacent to my property. Is this covenant still viable?
My neighbour has 2 restricted covernants on his land which I believe he has broken. What can I do to rectify the damage that he has done to my property value ?
So if LA sells all surrounding property to a housing association, then LA can no longer benefit from the restrictive covenant, but can the Housing association enforce it agains a successor in title?
From the above, I may have a positive covenant. It’s a private road with a covenant covering the upkeep of the road. It includes a company who retained ownership of part of the area. In all 9 owners. 7 want to repair and upgrade the whole area. 2 ignore requests and quotations. One of the 2 fills in holes which is a temporary fix . It’s been going on for over 5 years and the road/parking area is deteriorating further. Who would have to pursue the covenant and how?
Ido have a question? I’m sure it’s a silly one but I would just like to ask before, if this service is free and confidential.
Kind regards
Rick Gadsdon
Hello, I recently bought a piece of land that has the benefit of several restrictive covenants, put on by both Lancashire county council and hyndburn borough council , although hyndburn has sold their burden to a private company, LCC hasnt. My problem is that rhe company and lcc have allowed these covenants to be broken, it’s been over 45 years, since they were last used, about 7 companies are crossing my private access road to the main road, created easements, fenced off access, and in a couple of cases built on land that’s my access over their land. This is all protected by individual restrictive covenants. One of the companies is a billion pound supermarket ( aldi). I’ve been given a criminal record trying to enforce these covenants, and I’ve has several small claims thrown out, because they lied! I want the promises honoured. Please advise, thankyou
Hi,
There is a restrictive convenant shown in my deeds that a neighbour has threatend to enforce to stop me parking my motorhome on my drive. Can you indicate whether they have a strong case please, as they assure me they’ve been told the have.
Schedule of restrictive covenants
1 The following are details of the covenants contained in the Conveyance
dated 17 February 1956 referred to in the Charges Register:-
“THE Sub-purchaser hereby covenants with the Vendor as follows:
(i) To erect within one month after completion of its purchase and for
ever after to maintain a stock proof chain link and concrete post fence
to a height of at least six feet on the north-easterly side of the
Ordnance Plot Number 253 and also between the points marked A and B on
the plan annexed hereto.
(ii) Not to do or suffer or permit to be done upon the land hereby
conveyed anything which may be or grow to be a nuisance damage or
annoyance to the owner or tenants of any adjoining or neighbouring
property.
(iii) That no dwellinghouse erected on the said land shall be used
otherwise than for private residence.
(iv) No hut caravan shed house on wheels or pig styes shall be erected
or allowed to remain on the land hereby conveyed but this clause shall
not prohibit a garage and/or greenhouse.
Would my motorhome be classed as a ‘caravan’ for the purposes of taking this to court? It is a ‘motor caravan’ on the V5.
I’ve offered to move the motorhome further away from the boundary between us, by one parking space, but they say they don’t want it parked there at all because “they don’t like it”. Apparently we are to expect a solicitors letter next week asking us to remove it – do we have to comply? Other people have caravans and motorhomes parked on their drive in the same road.
We have recently purchased a house that has a restrictive covenant dating back to June 1905 on it and were advised by our solicitor at the time that as the company was dissolved in 2013 that this no longer was an issue. We are trying to extend the house and have full planning permission but our neighbor is now disputing this saying that:-
Clause (2) of the covenant states “the Purchaser for himself and his successors in title ……HEREBY COVENANTS with the vendors and their successors in title and also as a separate covenant with every other person who is now the owner of any part of the Vendors’ said Estate to observe and perform the covenants and stipulations set out in the Third Schedule hereto in relation to the land hereby transferred”
We have read the Covenant and cannot see that in the copy of the Land Registry Deed we received on completion showing the Covenant details.
In the Schedule of Restrictive Covenant it states:-
‘That they the said covenanting persons respectively their respective heirs and assigns shall and will on their respective parts at all times hereafter
up to and until the 31st day of December 1999
do and observe perform fulfill and be bound by all and every the stipulations acts deeds matters and things and pay or contribute all and every sum or sums of money costs and expenses respectively mentioned or express in the first schedule here under written to be done observed performed fulfilled ….’
Does this mean that the Restrictive Covenant was only restrictive up until 31st December 1999?
It also refers to a building line shown with a red dotted line. We do not have a copy of this plan, is there somewhere we can obtain a copy of this so we can see if what we are planning to do to the house is within the building line?