You may own property, but that doesn’t mean that you can do whatever you like to it. Many houses and land have restrictive covenants attached to them, which prohibit you and the property’s future owners from making certain changes.
Whilst restrictive covenants aren’t always a bad thing, they can prevent you from doing certain things. This could be anything from building a large shed in your garden to parking a caravan on your front drive.
Breaking a clause in your property deeds or contract could lead to legal action and potentially large payouts. You may not even be aware that you have breached the clause until you are contacted by a solicitor. It’s a good idea to understand your property’s covenants before making any changes to your home. It can prevent you from having to reverse the changes or pay fines and legal fees.
In this guide, we’ll look at the type of clauses that may feature in your deeds or contract and how they could affect your existing or proposed alterations to your home.
What is a restrictive covenant?
Property deeds and contracts sometimes have binding conditions called restrictive covenants. They are a legal obligation and determine the types of things that a homeowner cannot do to their property and land. There are a variety of situations that they can apply to, including when homeowners want to do the following:
- make alterations to the property, including building an extension or converting a house into multiple flats
- erect buildings or other structures on a section of land
- trade or operate a business on the land
- keep livestock on the land
- store motor homes on the land
- attach a satellite dish to the side of the property
Types of restrictive covenants
There are various common restrictive covenants that are added to property deeds and contracts. They specifically list changes that cannot be made to the property and the attached land. This could mean building an outhouse in your garden or adding an extension to your porch.
You may find that the deeds contain a clause that prevents you from running a business from the house or grounds. A restrictive covenant might also stop you from using the land for any other purpose than as a residential dwelling. For example, you may not be able to use it as agricultural land.
Restrictive covenants usually prohibit major changes to the property, but there may also be clauses that state you cannot keep a caravan in front of the property or keep chickens in your garden. A covenant may also be as simple as maintaining the garden so that it doesn’t become overgrown and untidy.
What is the difference between a restrictive and a positive covenant?
Covenants can be either positive or negative. Restrictive covenants are often referred to as negative obligations as they can impose limits on what can be done to your land or property. A positive covenant, on the other hand, is when you are obliged to maintain or contribute towards something.
There are occasions that a covenant may be worded to sound like it is restrictive, but it is actually positive (or vice versa). For example, the property deeds may include a section that instructs the homeowner “not to let the boundary fence fall into disrepair”. Whilst this may be worded negatively, it is actually a positive obligation to make sure that the fence is well maintained.
In the same vein, an instruction to use the property “solely as a residential dwelling” may be worded positively, but it is a restrictive covenant because it prevents the homeowner from operating a business within their house.
It’s important that you understand the difference between restrictive and positive covenants because they have different enforceability rules. Restrictive covenants apply to the property and land, which means that they are still applicable to any successors of the deeds. However, positive covenants are personal to the homeowners. This means that a positive covenant may not be applicable to subsequent land or homeowners unless a mechanism is added to the original documentation to make it so.
Both types of covenants are legally binding and will feature in the property contract. The property and its use are regulated by whatever covenants have been attached to it. However, there are some exceptions. You may discover that your property has previously been adapted in a way that breaches a negative covenant. If this was done more than 20 years ago without contest, the covenant is considered to have been waivered or released.
Why are restrictive covenants used?
Restrictive covenants are usually put in place to protect the appearance of the property and land. This is deemed particularly important if the house is on an estate because all the properties will be kept uniform. Many housing developers impose restrictive covenants so that homeowners can’t make changes to the property that would negatively impact the appearance and value of the neighbourhood.
For example, restrictive covenants may prohibit homeowners from installing satellite dishes on the exterior of the house, parking caravans or motorhomes on the land or keeping poultry on the grounds. These help to maintain the same standard for the property with the aim that it will make the house and neighbouring properties more appealing and easier to sell in the long run.
How can I find out which restrictive covenants affect my property?
It should be fairly easy to find the covenants for your property. A good place to start is the deeds or contract for your property. You can also consult the title plan and register, as this will usually list your property’s restrictive covenants. You can also check the Land Registry, although it won’t contain information if the covenants are unregistered.
It’s a good idea to make yourself aware of the restrictive and positive covenants on your property, especially if you are hoping to make changes to the property or land. There’s a chance that no one will be aware of a covenant breach, but potentially a neighbour or local authority could notice and take legal action against you.
Don’t assume that all properties have covenants. You may find that your property doesn’t have any such clauses, although you may still need planning permission from your local council to make any major changes.
Registered covenants will appear on the title deed on the HM Land Registry, whilst unregistered covenants will be listed as a D2 land charge on the Land Charges’ register.
You can also ask a solicitor to look into the issue if you are unsure or unable to locate the restrictive covenants. It’s better to double-check and make sure that you are aware of the restrictive covenants affecting your property and any adjoining land than face legal action after you have completed the alterations.
What is restrictive covenant indemnity insurance?
This type of insurance can cover you if there is an existing or proposed breach of a restrictive covenant that affects your property. It can also protect you if you have a proposal that may breach unknown covenants.
Indemnity insurance for restrictive covenants offers cover for damages or compensation that you have to pay to a claimant. It can also help financially with the loss of market value of the property, or the cost of demolition works to erected or adapted structures. You may need the insurance to contribute towards additional costs, legal fees and expenses in case the case goes to court.
The cost of indemnity insurance will vary depending on the existing or proposed breach. For example, the cost of insuring a proposed breach will be more expensive than covering a restrictive covenant breach that already exists, especially if there aren’t set to be any further changes to the property.
FAQs
Are new builds affected by restrictive covenants?
Restrictive covenants can affect a property of any age, whether they are newly built or have been around for hundreds of years. The age of the covenant doesn’t affect its validity, as restrictive covenants don’t expire. This means that restrictive covenants affect land indefinitely, even if they don’t seem as important now as they were when they were first imposed.
What happens if I breach a restrictive covenant?
You may be faced with legal action if another party wants to enforce a covenant that you have breached. It could mean that you are summoned to court and are ordered to undo the changes that you have made to the property or pay a fine or damages. It’s likely that you will have to pay legal fees too.
The best course of action is to seek legal advice as soon as you are aware that you have breached a covenant on your property. There are some instances where the covenant may not be enforceable, in which case you don’t need to take further action. It doesn’t necessarily mean that you are at fault and have breached a covenant, even if an individual brings action against you.
The following examples depict the factors that can affect the covenant’s enforceability:
- if the covenant is negative or positive, as positive covenants don’t run with the land
- if the covenant is properly registered and documented
- if a local authority is involved
- if it genuinely benefits the land
Although there are some instances that the affected party could seek damages over a breach of covenant, it is more likely that the breach will be ended through an injunction. Alternatively, you may be able to buy indemnity insurance if you inadvertently breached a clause in your property deeds more than 12 months ago and haven’t faced enforcement action. The insurance will help protect you in case a claim is made against you in the future.
Can I remove a restrictive covenant?
You may want a negative covenant removed because you feel it places undue restrictions on your property. The first thing to do is make sure that the restrictive covenant definitely prohibits what you plan to do to your building or land.
The next step is to identify the beneficiary of the covenant and appeal to have the restriction on the benefited land modified or removed. The beneficiary is usually the person who sold the property and will enforce covenants to ensure that the property maintains a certain standard.
You may have to pay a sum of money to the beneficiary before the restrictive covenants can be removed or altered. A Deed of Release will need to be issued and signed to release the restrictive covenant from the title deeds. It’s better to contact the beneficiary if you know which parties are involved so that you are able to resolve the restrictive covenant issues and alter your property.
Alternatively, you can apply to the Lands Tribunal (Upper Tribunal Lands Chamber) as they can help with disputes concerning the discharge or modification of land affected by covenants.
Summary
Real estate restrictive covenants are clauses that restrict what you are able to do with your property and land. A common clause that you may find in your title deeds is one that prohibits the use of your property for a business. You may also have to keep a fence around part or all of your property’s perimeter or be limited by the type or number of animals that you can keep.
Positive covenants differ slightly from restrictive covenants as they instruct you on what you must do rather than what you aren’t allowed to do. They also affect the current homeowners, whereas restrictive covenants affect current and subsequent owners. Such covenants are legally binding when you sign the deeds or property contract.
Covenants are implemented so that there is some level of control over the changes made to residential properties. They are designed to protect property values by maintaining the same level of maintenance and structure in a neighbourhood. This means that covenants can be beneficial as they ensure that you and other homeowners follow a certain standard with the upkeep and running of your home.