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The most common grounds for the Lands Tribunal agreeing to discharge or modify the restriction are that the restriction is obsolete due to the change in the nature of the neighbourhood since the time it was originally imposed, or that the restriction prevents the reasonable use of the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.
I recently purchased a property which was originally a school building from a nationwide homebuilder as they were developing land on the site and the old listed building was sold to us. In the title there is a restrictive covenant which states the property to be used as a single dwelling house. Due to the size of the property some 12 rooms up and 12 rooms downstairs we would like to split the property into two seperate units. Can the covenant be lifted so we could do this. I have contacted our local council planning and they have no problems as it makes sense to reduce the size of the property. I have contacted the home builder and their legal dept advised a convenant cannot be removed. Is there any other options to have this removed.
Tim,
Thank you for your query.
If the covenant in question has not been breached for a number of years without being challenged, and the previous owners (or their successors have been fully aware of the breach during this period then it sounds to me that the risk they will bring an action for breach of covenant at this stage is probably remote.
Such a claim would be extremely difficult to prove in any event,based on the facts as you describe them, and would be expensive to run, which makes such action even more unlikely especially if, as you say,there is no tangible benefit for them in doing so.
If you are concerned about the risk, then you could consider insurance or applying to Court for the covenant to be discharged on the grounds that it is obsolete or serves no purpose, but both of these options will cost money so you need to weigh up their cost/benefit against the respective risk.
I hope this helps, however if you wish to discuss further please give me a ring on the office number 01772 823921.
Regards
Colin
Tracey,
Thank you for your query.
The restrictive convenant is a private agreement between you and the builder and is not effected by any planning permission that the Council may previously have granted, nor is the fact that you are paying commercial rates. Those are matters which need to be resolved directly with the Council.
The issue here is whether your use of the property for business purposes is in breach of the covenant only to use it as a single residential dwelling.
Much will therefore depend on exactly what business activities are being run from the property and whether it can properly be said that the property is being used for commercial as opposed to residential purposes. This will require a more detailed analysis both of the terms of the covenant and the particular facts of your case.
If you would like me to look into this matter further and to provide a more detailed advice the legal implications for you, please contact me on the office number 01772 258321.
Regards
Colin
Hi,
I am a trustee of the local village hall. The hall was transferred to the Trustees in 1952 and the deeds include a restrictive covenant that prevents the sale, distribution or consumption of alcohol on the premises. The covenant has been breached over a number of years. Can you advise on the risk involved should we continue to breach the covenant. It is difficult to see what benefit the decendants of the original owners gain from the restriction or what damages thay may be able to claim. Certainly some of the descendants are aware of the breach.
Many thanks.
p.s we have been paying commercial rates to the council since we purchased the property
I purchased a house 4 years ago from a building company , the land has a house and planning permission from 1950 for commercial yard which is at the side of the garden. There was a restricted covernent on the property when l bought the house as there are out buildings and the builder didnt want me to convert them and sell them seperately it reads “use the property other than a single residential dwelling intended for the occupation of a single family” we are a single family, but can l still run a business from this site? please is there anyone who can comment on this?
We are about to buy a property which has a restrictive covenant relative to boundary walls, fencing and hedges etc. The wording is “18th June 1979
Not to erect or plant or permit to be erected or planted any gate fence wall or hedge or other erections between the existing building and the Estate road or roads co extensive with the property” We wish to build a wall with railing between pillars to privatise the property from the raodway. At the moment the front drive and paved area belonging to the house abbut the road and there is no deliniation of the boundary. This property is at the end of a cul de sac and has only 2 /3 properties at the side of it. We believe the construction company has now gone out of business but wish to get some advice before we buy. Thanks
Dear Al,
The fact that the construction company who originally sold the building has gone out of business does not mean that the covenants are no longer enforceable. Properly enforceable restrictive covenants exist for the benefit of specified parcels of land, and outlive the original covenanting parties. Therefore, if the covenants affecting your land have been properly drafted, there will be a parcel of land which has the benefit of the covenants. You will need to instruct your solicitor to investigate whether the covenants are enforceable by successor’s in title of the construction company, and if so which property has the benefit of the restrictions.
Thanks,
John Chesworth
I own a house and garden, freehold. The garden area used to belong to the developer who has now died. His successors then sold the freehold of the gardens to each of us for a small amount. Not actually to me but to a previous owner. The transfer deeds were done at different times and say different things. Some of them have covenants saying you are not allowed to put fences up or hang out washing. These have already been breached over the years by some. The residents used to be all elderly, now there are younger people with dogs and children. It is causing a lot of problems with complaints about dogs and children straying from their immediate house area. However, one person objects to the idea of fencing. The rest of us want to have fencing. This person says he can use the whole garden, a considerable size, and is saying we cannot change the covenant. Is he right?
Dear Lynda,
Without seeing the specific terms of the transfer documents it is impossible to advise in relation to fencing off the individual parts of the garden areas. If there is a covenant against fencing, then those with the benefit of the covenant can seek to enforce it. Whether or not the party objecting to the fencing has the benefit of the covenant will require a detailed study of the transfer documentation including his transfer, which ought to be available from the Land Registry. You should be able to get your solicitor to look at this issue for somewhere in the region of £500 plus VAT.
Thanks,
John Chesworth
Our garden is subject to a restrictive covenant. We have a planning consent for a new house in the garden and have applied to have a covenant waiver. A number of houses are covered by the same covenant and have been granted a waiver on payment of a fee. However, we have not only been asked for the fee but have been told that we have to agree to block up our existing garage entrance and to fill the gap with a hedge. Can they impose additional conditions in this way?
Hi,
I am currently in a situation that the downstirs of the property I aquired has a A5 use, the property has a restrictive covenant which prohibits commercial use, previous owner carried out change of use to A1 the A5, he was bankrupt and tranferred the pro[erty to a company. I bought the property on auction. I want to change downstairs to back to dwelling as it is not viable for a commerical use. I applied planning permission for the conversion, but council refuded it and stated restrictive covenant was not planning issue. my question is can council use its own planning control to provent owner to obey a restrictive covenant?