Restrictive covenants for property

Many types of property - both commercial and residential - often come with various rules about how the property can and cannot be used; these rules are known as restrictive covenants. Restrictive covenants are written into the deeds of the property by the seller (known as the beneficiary) and need to be agreed to by the purchaser. Read on for more information on restrictive covenants.

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What are the main types of restrictive covenants?

There are a wide range of common restrictive covenants, including:

  • Preventing alterations to be made to the property (eg conversion of a house into flats or building extensions)
  • In the case of land which is sold, preventing the erection of any new buildings on the land
  • Preventing land from being used for any business purposes
  • Restrictions relating to access over land
  • In terms of leasehold flats, there are often a variety of restrictive covenants designed to maintain shared conditions of communal living (eg keeping of pets, regulations on noise etc)

Other restrictive covenants are created specifically for a certain scenario - eg in the case of commercial properties which are sold, there may a stipulation that the property cannot be used by a business which directly competes with the seller.

How long do restrictive covenants last?

Some restrictive covenants last a set amount of time whilst others last indefinitely. It's important to note that restrictive covenants are passed down with the land; when the property or land is sold, the new owners are bound by the same rules. This means that it is vital for prospective buyers - particularly those who intend to develop the land or make significant changes to the property - to ensure they are aware of any restrictive covenants prior to going ahead with the sale.

Ask a lawyer to help check if a property is encumbered by restrictive covenants. You can also check the property by searching on the Land Registry website website.

What happens if a restrictive covenant is breached?

A property owner who breaches a restrictive covenant may be liable to:

  • Pay compensation (to the beneficiary of the restrictive covenant)
  • Stop any work which has brought about the breach (subject to an injunction)
  • Rectify the breach (eg demolish an extension which has been built in contravention of the restrictive covenant)
  • In the case of a business, it may need to cease trading at the property if its use of the property (for business purposes) breaches the restrictive covenant

If a property owner who has already breached a restrictive covenant wants to sell their property, they should Ask a lawyer for advice. It may be possible to purchase indemnity insurance which covers issues such as enforcement and potential reduction in property value etc.

How can restrictive covenants be changed or challenged?

The first step in changing or removing a restrictive covenant will be to speak to the beneficiary of the restrictive covenant to find out if they are willing to come to a new agreement. If this approach is not successful, the property owner can apply to the Lands Chamber of the Upper Tribunal to have the restrictive covenant modified or discharged. Ask a lawyer to help with this process.

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