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The most common grounds for the Lands Tribunal agreeing to discharge or modify the restriction are that the restriction is obsolete due to the change in the nature of the neighbourhood since the time it was originally imposed, or that the restriction prevents the reasonable use of the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.
Hi. A friend has recently bought some land with the intention of using some for himself and renting the rest for grazing horses. However he has found that the previous owner has put a covenant on the land preventing him renting the land, or making money from it in any way. What is the best way around this?
My property has the benefit of Restrictive Covenants, one of which clearly states that …
(iii) No tall forest or timberlike trees or shrubs shall be planted on the property hereby conveyed in such a position as to obscure the views from the said adjoining property of the vendor” … etc
When the trees were planted they were only 3-year-old saplings and obviously did not obscure the views. They are now reaching maturity and are having a considerable impact on the views. Owners of the neighbouring property, which is burdened by these Covenants, have been informed annually that their trees are in breach of that Covenant. They believe that to remove them or reduce them in order to protect the views would require positive action and therefore the Covenants are unenforceable.
There is also a Covenant that requires that …
ii)”… no act or thing shall be done or suffered thereon which shall be a nuisance or annoyance to the Vendor……”
I would be grateful for your comments and advice on the course of action, if any, I should take. I am concerned that if the neighbours should wish to sell their property, their failure to properly observe the Covenants could seriously impede the sale.
Five years ago I set up a small internet-only online shop selling small low-value toys and gifts. I contacted the Council and they said it was such a small-scale venture that business rates would not be payable and there was no need to apply for planning permission because there was no material change of use, no visitors, no signage etc and no visible indication that there was any ‘business’.
Now I have discovered there is a restrictive covenant on our property preventing ‘business use’ and the Council is trying to stop me trading. Lots of neighbours have small businesses – opposite is a hairdresser operating from a converted garage, a childminder, accupuncturist and other eBay sellers. The property was built in 1989, all of the other properties on the estate have been sold and the building company no longer exists in its original name but has possibly been taken over by a larger company. They have expressed no interest in my activities or those of my neighbours who also have small businesses (but do have customers visiting their homes).
I have no customers visiting, no signage, no bulky deliveries etc and the ‘business’ which is very small-scale receives very few orders – there were 7 orders last month netting a profit of £15 per week.
Can the Council stop me trading and sending out these orders from home? Or is enforcing the restrictive covenant solely a matter for the builder if they wish to pursue it? I have no funds for a legal battle – what could be the worst case scenario…? Prosecution…??
Advice would be appreciated.
Thank You
Hi Kirsten
In order to advise on a specific covenant and any rights that benefit your property it is necessary to fully consider the document(s) that created the restrictions and rights.
However, on a general note if you have a specific right to use a farm track to enter your field, the farmer cannot unilaterally obstruct that right. I suggest you contact him in the first instance asking him for a key to the lock. If he does not agree to this you may need to take further action. Before any further action is taken, I strongly advise that you get a solicitor to examine your property deeds and provide clear advice on your rights in this respect. We will be more than happy to assist if such action is required.
Regards
John
Hi,
I would if anyone could offer some thoughts on an issue. We have been in our house for approx 18 months now. It is a barn that the farmer sold off to developers. It has approx half an acre of ‘garden’ and then the previous owners bought a field that joins on to the garden. The field has a restrictive covenant on it which benefits the farmers mother who lives further up the lane. The covenant seems very restrictive in so much as it states that nothing may be planted on the land, no structure (perm or temp) or any object must be placed on the land. There is a farm gate giving access onto further farmland and a track at the bottom of our field. As the access round the front of our property is very tight there is another section called ‘benefits to the property’ which seems to say that we have right of way to use this track to enter our field. We now have planning permission to build on our garden (which doesn’t have a covenant) but the farmer has now padlocked and blocked off the access to this track. My mower is not bigh enough to mow the field and I now can’t get a larger mower in through the back gate. I cannot put any animals on to graze it as I cannot put any field shelter etc on the land. The land is consequently becoming a real overgrown mess. Anyone help?!
Dave
It is always difficult to advise on a restrictive covenant without seeing the whole document as all contractual clauses must be considered in the context of the whole agreement. However, if there is nothing else to the contrary in the document that imposed the restriction, it would appear that the restriction will only exist as long as the original transferor or his wife were in occupation of the property which had the benefit of the covenant. If they are now both dead, the restriction has ended.
There are a number of ways you can approach this situation, but the simplest and cheapest would be to obtain some clear evidence that the transferor and his wife are dead, (death certificates would be the best evidence) and store them with your deeds. By doing this you can prove to any subsequent purchaser that the restriction cannot be enforced.
Regards
John
Good fill someone in on and this enter helped me alot in my college assignement. Thank you for your information.
I have a restriction, which in effect, stops me using the land or building on one part of my property for anything other than agricultural purposes. But, for long as only….as the transferor and his wife or either of them shall be living and shall occupy the said land as their or the survivor’s private residence!
The original people are now dead and the house is let out for gain by the daughter; does the current position alter the original situation and give me the grounds to have it removed?
Many thanks,David.
Judith
From what you say it would appear that the restriction would cover your proposed development. As I have mentioned above the key thing is to see whether it would be enforceable against you and who has the benefit of the covenant.
There are a number of alternatives open to you even if it is enforceable including insurance. If you would like to give me a call on the number above, I would be more than happy to advise.
Regards
John
Vijay
You have come across a common problem for developers. There are two types of law governing development, the first is created by statute and often referred to as public law. This includes the planning system and also party wall act legislation. The other area is private law, in particular restrictive covenants imposed by the owner of land when he sells off part of his property.
The two codes create two separate methods of restricting development. Therefore, while you have planning permission, and have a party wall act award, your 5 storey development will be unlawful if it breaches a restrictive covenant.
You need to establish who has the benefit of the restrictive covenant, and then take some advice, on whether it is enforceable, and whether you could ensure against such enforcement. If you would like us to advise on this issue please do not hesitate to contact me on the office number 01772 258321.
Regards
John