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The most common grounds for the Lands Tribunal agreeing to discharge or modify the restriction are that the restriction is obsolete due to the change in the nature of the neighbourhood since the time it was originally imposed, or that the restriction prevents the reasonable use of the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 in a row of link detached houses, linked by the garages. In the title deeds of the houses there is a restrictive covenant stating that we must not build on or over the garage, as this would restrict the neighbours access to his roof.
We cuurently have a situation where the neighbour has obtained planning permission for an extension over his garage, and although aware of the covenant has stated it is not enforcable, is this the case ?
Many thanks
Just to add the copy our neighbour has produced was signed by my husband & myself but we do not remember anything about signing it as it was 37 years ago and was probably just put in front of us by our Solicitor as a one of many documents for our signatures.
We bought our house in 1976. Our Deeds which were held by Bradford & Bingley were all burnt in the Hays Warehouse fire in 1997. Therefore we do not have a copy of our Deeds and have a been unaware of its contents. Over the years we have built a large summerhouse,garage, stables, hay store etc for our horses and donkeys. We now find out that our neighbour who has lived in his house for 30 years is the successor of a covenant order on our property which states “not to erect any building other than one detached dwelling house with or without a garage and necessary outbuildings upon the land hereby conveyed or any part thereof. Any such building shall be in substitution for and not additional to the buildings now upon the said land.” Our neighbour has never told us about the Covenant and not objected to the above buildings. We now have applied for planning to split up our property and erect a small barn for us to live in and sell the house we have lived in since 1976. Last week our neighbour told us about the Covenant and states we are not to proceed with the new Barn. My question is that as we have over the years built so many buildings without him complaining does this now make the Covenant “Null & Void” with regard to our new Planning Application.
Shirley
Thank you for your query and I apologise for the delay in getting back to you.
As I have mentioned in other posts, the law surrounding restrictive covenants is complex and it is difficult for me to advise you on your specific covenant, without first seeing all the deeds and documents relating to it.
What I can say, as you have already pointed out, is that the only people able to enforce a restrictive covenant are those with the contractual benefit of it. Whether you do enjoy the benefit of the covenant would require some investigation and it is therefore impossible for me to comment on this at this stage.
If your solicitor has wrongly advised you, then he has acted poorly and you would be entitled to pursue a claim against him for your loss. You would also have a claim against the current owner of the burdened land for the breach of covenant.
If you wish to discuss this further, please call me on 01772 258321.
Kind regards
Katie
Dear Luke
Thank you for your query and I apologise for the delay in getting back to you.
The law surrounding restrictive covenants is complex and it is impossible to properly answer your query without having sight of the documents containing the covenant.
However, covenants which are properly executed run with the land, and therefore bind the original parties to the covenant as well as future land owners. It is therefore entirely possible that the covenant is enforceable by the new owners of the vicarage as well as remaining enforceable by the church.
In light of this, it is important to investigate the covenant fully before you embark on your development plans. A solicitor with experience in this area will be able to advise you further on this front, as well as advising on the options available to you, should the covenant remain enforceable.
Please call me on 01772 258321 if you wish to discuss this further.
Kind regards
Katie
Dear K Jay
Restrictive covenants are a complex area of law and you should firstly consult a solicitor to investigate whether this covenant is enforceable at all.
Assuming it is enforceable, the most time and cost efficient way to remove a restrictive covenant is to negotiate an express release from the covenant from the current owners of the benefiting land (these are the only people entitled to enforce the covenant). However, determining the benefiting land and its owners is not always straightforward. Even if you are successful on this front, there is the risk that they may not agree to the express release from the covenant, or they may require you to pay a premium for it.
Alternatively, you could make an application to the Lands Tribunal to have the covenants removed from the title. However, the Lands Tribunal will only remove or modify restrictive covenants if it is satisfied that the test in section 84 of the Law of Property Act is fulfilled and the covenants are obsolete. Whilst this is the best way of ensuring that there is no breach, it can be expensive and time consuming and there is no guarantee that the Lands Tribunal will find in your favour and remove the covenants.
Another option is to purchase indemnity insurance which would protect you against any claims for a breach of a restrictive covenant. If the covenants are enforced once insurance is in place, the insurers would pay for the cost of defending an action, any damages to the person with the benefit and compensation to the insured for any loss they incur in the covenants being enforced. However, many insurers will offer cover on a post planning basis only and it may be necessary to obtain planning permission before this option is available to you.
It is also important to note, that insurers may not offer cover at all, if you have approached the owner of the benefiting land for their consent to remove the covenant, as you will be bringing the potential breach to their attention and the risk of enforcement will be increased. It is therefore important to consider your options carefully before proceeding.
I hope this helps, however if you wish to discuss this further please give me a call – 01772 258321.
Kind regards
Katie
We have purchased a house in 2010 and their is a 7 year covernant.Last year the builder/land owner went into administration.I wish to put on a single storey side extention to our house within our boundary,the administrator will not allow us to do this and the the new land when sold are the people to ask.We fill this is un fair because the site is not being developed and we are looking over a building site due to the fact the original builder is not developing the land and the new builder when sold may not develope for some time ahead.Can we just go for planning an dfight the case if the new land owner contests th extension.
Can you tell me how I can find out if the land behind my property has any restrictive covenants, I believe the land to be classified as agricultural but the owner wanted to sell off to a developer and put up to 51 houses on it.
Thanks
Sharon
I have an R C on a parcel of land that reads that the land is to be used for agriculture or horticulture only or buildings for the same purpose and my house can be extended to a limit and I’m allowed to build a garage on it.
The land with the restriction was shared and half is owned by my neighbour and he also owns the adjoining land that I think now owns the benefit of the R C, is was a farm that has been broken up and sold off.
Twenty years ago my neighbour and I were given a change of use to domestic land to move a public footpath to the outer boundary.
Is changing the use of the land in breach of the restrictions and whoever has the benefit do they lose it as the breach has been in place un challenged for twenty years? or if my neighbour has the benefit and has agreed to the change of use and has breached it himself does that make it is obsolete
Thanks Rob
I am a Director of a Property maintenance Company which owns and is responsible for the upkeep of the common areas of a small development of 10 private dwellings. Each of the owners on purchase signed and agreed to abide by certain covenants appertaining to the Development. The Agreement is part of the purchasing documents and lodged at the Land Registry. On completion of the last house on the Development the Builder formed a Private Limited Company each Resident was required to purchase one share. The Company owns and is responsible for maintaining the common areas. The Builder also passed responsibility for the Covenants to this Company. During the past 10 years a number of minor clauses in the covenants have been breached by nearly all of the Residents/Owners. To date the Company has taken no action to correct these breaches.Matters have now come to a head particularly in relation to a possible sale of one of the properties and a prospective purchaser’s solicitor requesting confirmation from the Company that All Covenants have been complied with. As one of the Company’s two Directors we envisage a major problem. Each Owner has signed and agreed as part of his purchase to comply with the Covenants. Each of the Owners are also shareholders in the Company which is responsible for ensuring compliance with the Covenants. The Directors, also Owners/shareholders, are responsible for running the Company in accordance with Company Law. Have you any idea how we should deal with the problem. Could we request release of the Covenants through the Land Tribunal under the Law of Property Act 1925 as amended in 1969. Obviously cost is a major factor in any action the Company or individual Owners might be required to take. Apologies for length of question.