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The most common grounds for the Lands Tribunal agreeing to discharge or modify the restriction are that the restriction is obsolete due to the change in the nature of the neighbourhood since the time it was originally imposed, or that the restriction prevents the reasonable use of the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.
Stephanie
If a covenant is unenforceable, then it will be unenforceable against you as well as successors to your property. However, just because the covenant does not appear on the title register does not necessarily mean it is unenforceable. Further information about the nature of the land and the date at which the covenant was entered into is needed in order to provide a conclusive answer.
Please get in touch if you require further assistance.
Kind regards
Katie
I would be very grateful for your advice.
When I purchased my property I was made aware of a legal problem concerning a breach of a restrictive covenant by the previous owner.
The vendors put a personal covenant in place in the event that legal action was taken regarding the breach to indemnity me.
It was later discovered that the restrictive covenant was not contained in the title and therefore unenforceable.
My question is will future successors to the title be protected from enforcement?
Kind Regards
Maggie
As has been pointed out in many of the previous posts, without first seeing all the deeds and documents relating to the property we are unable to give definitive advice.
However, in terms of general advice many properties built on farmland have been given planning permission subject to an agricultural restriction. Agricultural restrictions ensure that workers in agriculture who need to live near to their place of work can.
With regard to your query of whether running an internet business selling something agricultural would be classified as employment within agriculture, unfortunately it would not. Agriculture is defined in section 336 of the Town and Country Planning Act 1990 as including horticulture, fruit growing, seed growing, dairy farming, breeding and keeping livestock including any animals kept for food production, wool, skins for fur or for the purpose of farming the land, the use of the land as osier land, market gardens and nursery grounds or woodland where that is ancillary to the farming of the land for other agricultural purposes. Normally, to satisfy agriculture restrictions you would need to be working in agriculture or be retired from working in agriculture within a 30 mile radius of the property or be using the land at the property to provide your main source of income.
Agricultural restrictions can be removed by making an application to the Local Planning Authority (LPA). Before removing the restriction the LPA would need to be satisfied that there is no longer a need in the locality for properties for agricultural workers. This is normally satisfied by actively marketing the property at a reduced value reflecting the restriction for a period 12 months. If the property remains unsold, then the LPA may decide to remove the restriction. However, this is not guaranteed and there have been cases where despite active marketing and properties remaining unsold the LPA have refused applications for the removal of agricultural restrictions.
An alternative to removing the restriction is to apply for a Certificate of Lawfulness. A Certificate of Lawfulness can be obtained providing that there has been ten years’ continuous breach of the restriction and the breach has gone unnoticed. This means that the LPA must not have served an enforcement notice in the past 10 years requiring the occupiers to remedy the breach. Once a Certificate of Lawfulness is obtained the LPA are effectively barred from enforcing the restriction, however, if the restriction is performed at a later date it will be deemed to be reinstated.
Neither of these options should be pursued lightly or without proper legal advice and investigation. If you apply for a Certificate of Lawfulness under the impression that the previous occupiers have not worked within agriculture for the past 10 years and it comes to light that it is only 8 years, you will find yourself owning a property you cannot live in. Likewise, if you purchase the property and then make an application to remove the restriction which is refused by the LPA. The best way to safeguard your position would be to make the purchase of the property conditional upon the Seller removing the restriction or obtaining a Certificate of Lawfulness.
If you would like further advice, please do not hesitate to contact us on 01772 258321 and we will be happy to assist.
Kind Regards
Rhian
A property I am interested in has a restriction of occupier must be employed in local agricultural (past or present) on it. The covenant has been moved from one property ,on a farm that was broken up,onto this property. There is not enough land with the property to support any form of agricultural occupation. How do I go about lifting the restriction? Also if I ran an internet business selling something ‘agricultural’ from the building, would this class as employment within agriculture?
Diana
Thank you for your query.
The right of access you enjoy over your neighbour’s land is known as an easement, the parameters of which can be lawfully limited by the purpose and manner for which it is granted.
Therefore, if you begin using the right of way for a purpose beyond which it was granted, the Farmer will have a number of remedies available to him, including, amongst others, seeking a payment of financial damages from you and seeking an injunction from the court to prohibit the unlawful use. In terms of damages, if the loss suffered is minimal, the damages that are awarded may also be nominal.
Please get in touch if you have any further queries.
Kind regards
Katie
Lin
Thank you for your query.
Generally speaking covenants between the original seller and the original purchaser are binding as a matter of contract and many of the rules surrounding enforcement are only applicable to successors in title.
However, if you were to sell the land to a third party, the covenant would not necessarily be enforceable against them and further investigation in to the enforceability of the covenant would need to be undertaken in order to advise definitively on this.
I would be happy to look in to this for you, if you so wish.
Kind regards
Katie
I would be very grateful for your advice regarding a covenant on paddock land that we purchased in November 2001. The seller placed a covenant worded as follows:
1. A transfer of the land in this title dated 16th November 2001 made between (1)’THE SELLERS’ and (2) ‘THE PURCHASERS’ contains the following covenants :- “the transferees hereby jointly and severally covenant with the transferors so as to bind the property into whosoever hands the same may come:
(a)not to use or permit the use of the property for any purpose other than agriculture or the grazing of horses kept for recreational purposes.
(b) not to build or allow anything to be built on the property except structures which are ancillary to the use refered to in sub-clause (a) above. END OF REGISTER
The sellers have not retained any adjoining land or linked the above covenant to any land or property and they do not live in the area. They own a very small strip of land a short distance away(which is not adjoining) to which they have no access and therefore do not use in any way, it also can’t be seen from our paddock and any change of use of our land would have no impact on this strip at all. We have recently had interest from developers in our paddock and have been advised that the covenant may not be enforcable as it is not attached to any land or property which would have benefit or suffer loss.
I would very much appreciate your thoughts on the above. Regards, Lin
I’m wondering if someone can advise on this.
Our house is accessed by a road now owned by a farmer.
A very old covenant gives us right of access for the enjoyment of the property but prohibits us from commercial use. We share responsibility for maintenance of the road.
We want to turn our barn into a holiday cottage, which I consider is commercial use? The farmer has said he doesn’t want to amend the covenant even if we pay him.
What happens if we just ignore the covenant or try to contest it?
Our property is on the very edge of his farm, his farmhouse many miles away, there can be no impact to him at all.
We have been considering building our own access road which also means building a bridge which would be very costly and annoy the farmer anyway, so it’s worth our looking at the possibility of breaking the covenant as long as there’s no risk of us losing our right to access?
Thank you.
Michelle
Thank you for your query.
Covenants which require you to take a positive step, such as the payment of money, are slightly different from the covenants which are the subject of this blog.
Positive covenants do not run with the land and are not, on their own, enforceable against subsequent owners of land. However, the burden of positive covenants can be passed on to subsequent land owners through an unbroken chain of indemnity i.e. if each subsequent owner of the land agrees to observe and perform the positive covenants. If an owner of the land then breaches a covenant that he has agreed to perform, the party with the benefit of the covenant can claim against the original contracting party, who will seek to be indemnified from their successor in title, and so on. If the chain of indemnity has been broken at any point, you will not be bound by the covenant.
Please call me on 01772 258321 if you would like further advice.
Kind regards
Katie
John
Thank you for your query and apologies for the delay in getting back to you.
There are various options available to you, many of which you have identified in your post. However, without having sight of the covenant itself and any other relevant documents, it is impossible to advise you on which of these options is the best way forward in the circumstances.
What I can say, is that planning permission and restrictive covenants are two independent planning controls; the presence of a restrictive covenant on a piece of land should not affect whether or not planning permission is granted. However, we cannot guarantee what factors will determine the outcome of a planning application and if there are many objections to an application, this may be taken in to account, whether they are on the basis of the presence of a restrictive covenant or not. Additionally, the restrictive covenant may prohibit the development, even if planning permission is granted (and vice versa).
Additionally, if the Bank has no interest in the land, they would not be in a position to release the covenant as only the owner of the benefiting land is able to release a restrictive covenant.
If you would like further advice on this, please call me on 01772 258321 and I would be happy to assist.
Kind regards
Katie