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The most common grounds for the Lands Tribunal agreeing to discharge or modify the restriction are that the restriction is obsolete due to the change in the nature of the neighbourhood since the time it was originally imposed, or that the restriction prevents the reasonable use of the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.
Dear Charles
This is quite a complex scenario, and it would be impossible to advise definitively without further investigation.
However, there are a couple of general points to make:
1. Restrictive covenants entered into after 1926 and before first registration, must be registered against the name of the estate owner as a D(ii) Land Charge in order to be enforceable. Undertaking a Land Charges search will reveal if the covenant was properly registered and it is worth taking this preliminary step in the first instance.
2. Even if the covenant is properly registered, the precise wording of the covenant can determine whether or not the covenant remains enforceable by successors in title. You mention the farmer is now dead; the covenant will need to be adequately worded for the benefit of the covenant to pass to subsequent owners of the land.
If you require further assistance on this matter, please call me on 01772 258321 and I will be happy to assist.
Kind regards
Katie
I unfortunately am in dispute with my neighbour and I have unearthed a can of worms with my restrictive covenants. Three barns were sold for conversion into dwellings 18 years ago. I have discovered that the Old Farmer to avoid capital gains tax sold the Barns with delayed payment, none of the Barns had mortgages and a cash deposit I believe was paid. The new owners went ahead and got planning approval declaring themselves as the owners and all moved in a year or so later after spending hundreds of thousands on the build costs and building regulations but did not register their Barns with Land registry. The carrot for the new owners was they didnt pay upfront for the Barns and the carrot for the Farmer was avoiding the capital gains tax.
The owner of the Barn which is mine now ran out of money after 18 months and had to get a mortgage. So finally one of the Barns was registered nearly two years after it was sold. The Farmer attached restrictive covenants to the barns at this stage in 1997 however He did not own any of the land at that stage. Technically he still owned the other barns
but in reality the other barns had been sold just not registered. The next barn registered 4 years after they had purchased it, and believe it or not the Barn I am having problems with didnt register till 2006 , eleven years after they bought it.
It is a legal responsibility to register unregistered land and compulsory with registered, all the Barns were made up of a combination of both registered and unregistered. If you do not register within three months you have to provide an explanation.
The old farmer is dead now and the barn with eleven year late registration is causing problems with my privacy, I want to build up my boundary wall and they are claiming I will be in breach.
Where on earth dose this leave me with the restrictive covenants ? They are on my deeds but look like on the evidence are invalid.
I have demanded from there solicitor to see the original deeds to their property as the Land registry has lost them . But they refuse to show them to me!
Hi
We have a deed of covenant in our deeds of mortgage for our property in which we have to pay for the upkeep of the green areas of the estate to a third party. However the third party are not fulfilling their side of the agreement and the green areas have not been maintained and they are threatening legal action against us for non-payment. Is there anything we can do against this, is this an enforceable covenant?
Any advice would be greatly appreciated.
Michelle
My wife was held to ransom by her sister regarding 2 acres of land they inherited, my wife had maintained the field for many years and it was always understood that she would benefit from the land after her mothers death. Unfortunately this was not stated in the will, the sister claimed half then later sold her half to the wife, as part of the sale she forced the following burden on the land ““The Transferee covenants with the Transferor, for the benefit of the Benefiting Land and each and every part of it, with the intention of binding the Burdened Land, and each and every part of it not to use the Burdened Land for any purpose other than as:-
i. Agricultural or arable land; or
ii. For the grazing of horses (but not as a commercial venture); or
iii. As a domestic garden ancillary to the property known as ********* ******, Leeds, ******* under HM Land Registry title *******.” ”
The wifes sister has a house on the benefiting land and she sated it was to protect her view.
I understand her wishing to keep her view but as agricultural land it fails to prevent any buildings, smell or nuisance on the land… or even the planting of very large trees along the boundary, in affect blocking the view.
We feel that the burden offers no beneficial value to her property.
We have been approached by a developer and would be grateful if you could advise if it would be worth pursuing the removal of the burden.
Regards John
Dear Wendy
If the land with the benefit of the covenant has changed hands since the covenant was originally made, then the covenant may be unenforceable if it doesn’t meet certain pre-conditions.
For example, the covenant must not be expressed to be personal to the original covantee and the benefit of the covenant must have successfully passed to the person seeking to enforce it.
Determining whether a covenant meets the necessary criteria is not straightforward and it would be necessary to conduct further investigations in order to advise you definitively on this particular covenant.
Unfortunately, if the covenant is enforceable, the fact that your neighbour has overlooked previous breaches will not make the covenant void.
Please call me on 01772 258321 if you would like to discuss this further.
Kind regards
Katie
Your blog is very interesting reading. Any advice you can give with regard to our case would be gratefully received.We purchased piece of land from the local council(5 years ago) next to our property which has restrictive covenants stating land only to be used as garden for our property and only to be sold as part of our property.The restrictions did slip our mind and our daughters applied for planning permission for a pair of semi detached houses on the said land which was refused {not because of the restrictions}. My daughters took their case to appeal and they subsequently won the appeal and were granted planning permission.We were ready to start but had a query with the access which we enquired of the council which in turn revealed the covenants.We have met with the council and they have indicated they will vary the covenants for a monetary fee which is good news. They have indicated that the fee will be arrived at by taking the valuation of the completed development less the cost we paid for the land and expenses incurred obtaining planning permission,legalfees, costs for services and any other costs we feel pertinent, then 25/30% of that figure will be the compensation they would be looking for .We did point out that we have been on with this project for three years.At the moment this is an unserviced plot with planning permission for a pair of semi detached houses and we feel the way the council wish to value the compensation fee may work out higher.I was interested in reading Matts case on Aug 1st 2011 where he says the reduction in his parents property – does this mean we could include the cost of the devaluation of our property due to the disposal of the land.We have informed the council that no money was to change hands this was a gift. 3 years of work enabled the planning permission to be forthcoming.The sale of the covenants has a benefit to both parties but if the councils price is too high my daughters will not be able to afford to proceed which will make it a no win situation for either party. Any advice you can give would be gratefully received. Thanking you in anticipation.
Dear Martin
Unfortunately the circumstances and documents surrounding the creation of the covenant and its enforceability would need to be investigated to give an appropriate response to the issues raised by you.
Generally speaking, restrictive covenants are enforceable between the original parties to the covenant as a matter of contract. There are exceptions to this rule, for example where the covenant is uncertain or ambiguous or where the covenantee assigns the benefit to a third party. Where the person seeking to enforce the covenant and the owners to the burdened land are successors in title to the original contracting parties, there are several pre-conditions that must be met in order for the covenant to be enforceable.
Please contact me on 01772 258321 if you want me to investigate the enforceability of this particular covenant for you.
Kind regards
Katie
Dear Ray
Your comment certainly does raise an interesting issue.
As you will appreciate, without sight of the covenant it is not possible to give definitive advice but as a general comment, the benefit of a restrictive covenant can pass on a transfer of land. We would need to investigate if the benefit had passed to the new owners and if it has, regardless of the unfairness, the person with the benefit of a restrictive covenant would be able to enforce the covenant in the event that it is breached.
Additionally, the covenant will remain enforceable even if planning permission is granted for the extension, as planning permission and restrictive covenants are separate issues.
We would be more than happy to investigate the enforceability of the covenant if you wished to call to discuss further.
Kind regards
Katie
Dear Sharon
Thank you for your post.
Restrictive covenants imposed on land will be referred to in the title deeds and documents of the property they affect. If the land in question is registered, a copy of the title will be obtainable from the Land Registry, and the covenant must be referred to in the Charges register in order to be enforceable.
The situation is more complicated if the land is unregistered and it would be necessary to have sight of all the title deeds and documents relating to a property in order to ascertain if any covenants exist. Where a piece of unregistered land has changed hands many times, there are often at least some deeds missing and it is therefore impossible to be sure whether or not there are covenants affecting that land. However, since 1926, in order for a covenant to be enforceable over unregistered land, it must be registered as a Land Charge and it is possible to do a search against parties to a conveyance to see if a charge has been registered. Again, this is often not conclusive as there may be missing deeds and parties who are unknown.
As touched upon above, just because a covenant exists, does not mean it is enforceable and we would be able to investigate this further for you, if you so wish.
Please give me a call on 01772 258321 if you would like to discuss this further.
Kind regards
Katie
Rob
In order to advise you definitively I would need to see the full wording of the restrictive covenant – as you will appreciate the exact wording is needed to give a proper construction to the meaning of the covenant.
Generally speaking, if a breach of covenant has occurred the person with the benefit would have the ability to enforce its terms. The person with the benefit may be prevented from enforcing its terms where there has been an express release of the covenant or an application has successfully been made to have the covenant discharged or modified. It may be worth giving further consideration as to whether the person with the benefit of the covenant has acquiesced to the breach and this would involve a careful and detailed examination of the specific facts.
Where land that is subject to a restrictive covenant is purchased by the person with the benefit of the covenant, this will have the effect of extinguishing the covenant in so far as it relates to the land in common ownership, but in respect of other land the covenant remains capable of enforcement.
If you require any further information on this matter, please give me a call on 01772 258321.
Kind regards
Katie