Covenants over property
Being an owner of the property, you might think that you can do whatever want with your property provided you have planning permission and meet building control standards. While this is generally the case, there can still be restrictions or obligations on you. When you buy a property, you should be aware of these, known as covenants.
What is a covenant
A covenant is a promise written in a deed. They can be positive (promises to do something) or restrictive (promises not to do something).
Covenants are often given by subsequent owners of property in order to protect the rights of the seller (or people to whom those rights are passed in the future) or of neighbours.
Covenants “run with the land”. In other words, they are on the land not the land owner. When the property transfers from the old owner to the new owner, it takes forward the covenant on it.
Being aware of covenants
During the conveyancing process, the seller should always bring any covenants to the buyer’s attention, even if the seller does not know who might enforce them or whether they could be enforced.
The buyer must then decide whether the covenants are relevant to him or her.
The sale contract will state that the purchaser has full knowledge of all the covenants and that no questions or objections will be raised subsequently. The effect of this is that the seller does not need to be involved in trying to remove the covenant, and that the buyer can’t back out of the contract later because he was not aware of one.
Where are covenants recorded?
If the property is registered (at the Land Registry), then it is usual simply to add into the sale contract a reference to any covenants as recorded in the Official Copy of Register of Title. So you need to look at the title deed to find out the covenants.
The title deed will show any covenants affecting the property under the “Charges Register”. You may also want to attain the title plan from the Land Registry as this can help you identify which parts of the property are subject to covenants by coloured lines and shading. There may also be a reference to the original documents which contained the restrictions. If the title indicates “Copy in Certificate”, you can request the original document as well (not all original documents for older properties are held by the Land Registry).
However, where the seller wishes to add a new covenant, or where the sale is for part of a larger piece of land (where land is being subdivided and sold in parcels), they may be summarised in the contract for sale and written in detail in a schedule attached to the contract.
If the property you are buying is unregistered (which is quite unlikely), then the Land Registry will not have any information about the covenants on that property. Unless you can locate the original title deeds, you will not have much to determine whether your property is affected or not. You may be able to obtain some useful information if you request neighbouring owners’ title deeds instead (particularly when a neighbour is trying to enforce a restrictive covenant after you have bought the property).
What are restrictive covenants?
Restrictive covenants prevent the owner from doing certain things in relation the property, usually to allow the neighbours to have “quiet enjoyment” of their properties, or to force an owner to ask the beneficiary of the covenant (the person who enforces it) to let it lapse (usually for an additional price). Examples of restrictive covenants are to not to:
- build fences above a specific height
- use the property for commercial purpose
- keep farm animals on the property
- install security cameras in the front of the property
- make certain types of alterations or extensions to the property (perhaps unless it is of at least £X in value)
- park a caravan or boat in front of the property
- deviate from the rules that apply to all other residents on the housing estate
What to do if there are covenants on a property
There is not a lot you can do about covenants.
Seek the beneficiary
If you can find out who benefits from it, you may be able to buy him or her out (asking for an agreement to let it lapse). However, there are two issues here.
The first is that if the covenant can be enforced by multiple people, you will need to approach each person. You may find that nine out of ten neighbours agree, but a particularly stubborn one refuses out of some long held principle that you can’t persuade him or her to relax.
The second is that finding the successor beneficiary of a covenant can be difficult if the covenant was written into the deeds many years ago. The beneficiary may not even know about his or her rights before you approach him or her. It may be the case here that the probability that the covenant is enforced is so low, that it is not worth worrying about.
Apply to the Land Tribunal
You could apply to the Land Tribunal to have them discharged or modified. You will need to prove to the Tribunal that the covenant is obsolete or impedes a reasonable development or use. This is a lengthy and expensive process but it takes the problem out at the root.
Restrictive covenant indemnity insurance
Take out restrictive covenant indemnity insurance. This type of insurance protects you against cost implications of a third party making a claim that you have breached a covenant. It is particularly useful if the previous owners have breached a restrictive covenant, because you can still take out an insurance policy to be protected. Policies tend not to cost very much. This is usually the route that a mortgage provider asks you take.
You might also take a view that while there is a restrictive covenant, its existence does not affect your enjoyment of the property. For example, you may not have a boat or caravan to park outside, you may have no interest in keeping sheep on your small front garden and you may not want to use your kitchen commercially.
How are restrictive covenants enforced?
Covenants are only enforceable against a “successor in title” (an owner) if they confer a benefit on land that was owned or retained by the person taking that benefit at the time that it was given, or his or her successors.
To enforce one, a person needs to have an interest in the land. That limits greatly who can enforce it – usually to neighbours, put perhaps to a descendant of a previous owner.
That person would issue a court summons. Given the cost of litigation, unless the value of the breach is sufficiently high to merit the cost, time and stress of going to court, most breaches are unlikely to be enforced.
Not only that, but most people who might be able to enforce one are generally unaware of their rights. The great-great grandson of a house builder, who now lives abroad, is unlikely to be aware of your breach or of his rights.
What to do if a restrictive covenant has already been breached?
The first thing to do is to ascertain for how long the covenant has been breached. If you are buying the property, you could ask the current owner (the vendor). However, getting independent evidence is also a good idea.
If reliable evidence shows that the breach occurred more than 12 years earlier, then the covenant can no longer be enforced.
However, the Council of Mortgage Lenders still insists that even if it is unlikely to be enforceable, indemnity insurance is required. If you are the seller, you could offer to take out insurance for 10 years for the buyer. If you are the buyer, you might consider negotiating a discount on the purchase price.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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