Restrictive Covenant Dispute Solicitors

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Restrictive Covenants
 Jessica Seehye
Legally reviewed by: Jessica Seehye

What is a Restrictive Covenant?

A restrictive covenant is a binding condition that is written into the property’s deeds or contract by a seller. Restrictive covenants determine what a homeowner can and cannot do to the house or land in different situations. What you can and cannot do can vary with the most common examples including:

  • not allowing trades or businesses to operate on the land
  • preventing additional builds or substantial structures to be put onto the land
  • prohibiting owners from making changes to the property such as building an extension or converting the property into flats.

Why Do Properties Have Restrictive Covenants?

In most cases, a restrictive covenant is added to the Transfer Deed and is implemented by a property management company or a housing developer. The purpose is to make sure the properties in the area adhere to certain standards of design and uniformity. In addition, it prevents house owners from carrying out work that may negatively impact the neighbourhood or take away a level of uniformity.

A restrictive covenant could potentially prohibit:

  • satellite dishes
  • security cameras attached to a property
  • parking a caravan or boat visibly out the front of the property
  • keeping livestock
  • not maintaining the garden to a basic standard

What Properties Do Restrictive Covenants Apply To?

When it comes to properties that a restrictive covenant applies to there is no set rule. Both older and new build properties can be affected by restrictive covenants. In some cases, the restrictive covenant may be old enough that the original landowner cannot be traced and therefore the restrictive covenant is no longer valid.

How Our Conveyancing Solicitors Can Help

A restrictive covenant not only applies to the current owner of the property but also applies to all future buyers. Therefore, if you are buying a property, you must instruct your conveyancing solicitor to thoroughly check for any covenants in the property deeds before closing the transaction. This is because once the title deeds are signed you are held accountable if you breach the restrictive covenant.

In addition, you should get your conveyancing solicitor to help you locate the ‘benefit of the covenant’. In most cases, this usually resides with the landowner. However, in some cases, the benefit of the covenant can be passed on to another individual or private company. Knowing where the benefit of the covenant resides allows you to know who is responsible for enforcing the covenant and to who you can submit any questions or applications.

Can Restrictive Covenants Affect the Cost of a Property?

It is important to consider whether restrictive covenants will affect the saleability of a property before you purchase it. Because the covenant can restrict further building work on the property this can have an impact on the property value. As a result, sometimes mortgage lenders will not lend on properties where the covenant is considered to affect the future saleability of the property.

In this situation, our conveyancing solicitors can help you to contact the vendor or ‘successor in title’ to inform them that you cannot purchase to property if they enforce the restrictive covenant. In the case where the vendor believes the covenant could negatively affect them selling the property, they may be more likely to remove the restriction.

Getting Legal Advice for a Breach

If you have breached a restrictive covenant you can be made to undo any work that goes against the restrictive covenant. You can also be made to pay a fee which can cost thousands of pounds. In some cases, you may face legal action.

However, applying for restrictive covenant insurance can protect changes done to the property. This is if no one disputes the changes for 12 months.

What to Do If You’ve Breached the Restrictive Covenant and You’re Selling the Property?

Restrictive covenant disputes can become complicated therefore we recommend enlisting the help of an expert conveyancing solicitor as soon as possible.

Your conveyancing solicitor will go through the records on the land charges register to assure the records are relevant. Additionally, they will review the wording of a covenant, making sure it is enforceable.

Once your conveyancing solicitor has checked how likely it is for the covenant to be enforceable, they will look at the insurance options with you. This will help provide financial cover for any further breaches. Additionally, the insurance can help to cover, possible damages to compensation, alteration costs, damage to the value of the property, and finally any legal expenses.

Restrictive covenant indemnity insurance can only be sought once at least 12 months pass without any complaint. Once the homeowner obtains the policy it becomes long-term and passes to future owners.

How to Make a Restrictive Covenant Dispute

If you are unable to obtain an insurance policy, then you can get in contact with the holder of the benefit of covenant and ask for ‘retrospective consent for the work. If the benefit of covenant owner is not traceable, or additionally if they refuse permission, seek compensation for the breach, or change a prohibitive fee, we recommend getting into contact with our conveyancing solicitors as soon as possible.

Our conveyancing solicitors can help you apply to the Lands Chamber of Upper Tribunal. This will allow you to dispute the restrictive covenants and request their removal or a change of them. This can be a costly proceeding and our conveyancing solicitors will always formally aim to help you procure insurance as this is a cheaper option.

Reasons that Restrictive Covenants Can Be Invalid

The Lands Tribunal will declare a covenant invalid if:

  • the character of the property has changed
  • there is a continued existence of the covenant that would not allow reasonable use of the land
  • the person entitled to the benefit of the covenant agrees to its removal
  • removal of the covenant will not affect the person entitled to the benefit.

A conveyancing solicitor will help you obtain the required information for the application to the Lands Tribunal.

Next, the Lands Tribunal will publish notices to alert anyone who has an entitlement to the benefit of the covenant. This will allow them to come forward with any objections.

The holder of the benefit of the covenant may oppose the application to modify or remove the covenant. As a result,  they have 28 days from the application to give the Registrar notice.

The applicant may be liable and must pay compensation for potential losses from their modification of discharge of the covenant.

Getting Legal Help from Our Conveyancing Solicitors

It is important to understand the effect of restrictive covenants, especially if you are carrying the burden of one. Therefore, our conveyancing solicitors can help ensure you will not be liable for damages or be subject to an injunction. At AWH Solicitors, we will guide you through the process if you are experiencing any disputes.

To discuss the legalities surrounding restrictive covenant disputes, please call us on 0800 999 2220 to speak to one of our solicitors.

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