What are restrictive covenants?

| 5 min read

Restrictive covenants are legally binding condition attached to a property that will bind the owner of the property. They restrict the use of land for the benefit of another.

 Restrictive covenants once made bind the current and all future owners of the property, until they are withdrawn by the person for whose benefit they are or modified or released by the Land Tribunal.

Where will you find the restrictive covenants?

They are contained in the property’s deed or contract of sale by the seller.

How will restrictive covenants affect you?

They usually take the form of covenants preventing the owner of the property from making alterations to the property, may prevent substantial structures from being build on a specific section of land, or preventing the property from being used for commercially and trades purposes.

Therefore, before you exchange contracts, you should talk to your solicitor or licensed conveyancer to guide you what restrictions you will face if you purchase your desired property.

Restrictive covenants may prove to be seriously prejudicial to you as they affect things such as getting a mortgage as restrictive covenants may even have an impact on the saleability of the property.

Breaches of restrictive covenants and solutions

You may have to undo any offending work, pay a fee or may even face legal consequences if you breach a restrictive covenant. However, if the benefits of a restrictive covenant have passed onto another person, the new beneficiary may not see it as necessary.   Resultantly, the beneficiary might not seek to enforce his rights. Therefore,  you could seek the beneficiary and request him to withdraw the covenant.

Restrictive covenant insurance policy

In such cases, you may be in breach of a covenant without any challenge. You can get restrictive covenant insurance to protect yourself where you have been in violation for over 12 months. You may even pass on the benefits of the insurance policy to any new owners of the property, should you choose to sell it.   

Retrospective consent for work

If you cannot obtain an insurance policy, then you can approach the person for whose benefit the covenant is and seek a retrospective consent for work.

Land Tribunal

However, if you cannot trace the person, you can approach the Land Tribunal which has to power to modify or discharge restrictive covenants.

However, this is a costly and time-consuming process, and there is no guarantee of success. Even if you do succeed, you will have to cover your costs. However, if the Tribunal does not accept your claim and sustains the objection of the person whose benefit the restrictive covenant is for, you may have to bear their cost for challenging your claim.

What can you do if your solicitor or licensed conveyancer failed to inform you of any restrictive covenants?

Legal Ombudsman

You may also face a situation where your solicitor or licensed conveyancer failed to point out a restrictive covenant which now inhibits the enjoyment of your property. You can make a complaint to a legal ombudsman. Legal ombudsman deals with complaints against legal services providers.

However, you first have to use the internal complaint procedure of your solicitor or a licensed conveyancer. The solicitor or the licensed conveyancer will be forced to pay compensation If the legal ombudsman finds your claim valid. Legal ombudsman can make a financial award of up to £50,000. Please visit https://www.legalombudsman.org.uk/ for further information on how you can complain against your solicitor or a licensed conveyancer.

Summary

Restrictive covenants are conditions attached to a property that bind the original owner as well as subsequent owners. It restricts the use of the property for the benefit of another person. If you breach a covenant, you may have to have to undo any work which you may have begun on the property and may even face legal action. Therefore, you must be aware of all restrictive covenants that may be attached with your desired property.

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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