How To Deal With Restrictive Covenants

At Hodge Jones & Allen, we pride ourselves on providing comprehensive legal assistance across a spectrum of issues. In our Dispute Resolution department, our dedicated Commercial Property Dispute team stands ready to advise on a range of matters.

This blog focuses on a popular area of concern for investors, property owners and developers’.

Restrictive covenants

It is often the case that when you purchase a house, piece of land, you have many ideas and dreams as to how you may extend the property or use it. There can be a given mind-set of ‘my land my rules’. Therefore it is very important to understand how the use of your land can be limited by the existence of a restrictive covenant.

As with many land transactions, hidden amongst the title documents, lie lengthy and intricate terms and clauses governing the rights and usage of the land. Among these clauses, some empower the landowner to undertake certain actions, while others impose restrictions.

These restrictions, known as Restrictive Covenants, play a pivotal role in shaping the permissible use of the property.

Deciphering Restrictive Covenants

Restrictive Covenants serve to prevent property owners from utilizing their land in specific ways. Common examples include prohibitions on commercial activities, subletting, or alterations to the property’s structure, extensions, the type of windows or doors that you can have, removal of trees, boundary fences or walls etc. For prospective purchasers, ensuring alignment between the terms of the land and their intended use of the property is paramount

You have a restrictive covenant in your title documents. Is it enforceable?

Picture this: you’ve just signed on the dotted line for your dream property, only to discover a clause tucked away, imposing restrictions on what you can and cannot do with the property. Are these restrictions legally binding? In short, yes. Restrictive covenants have the power of a contractual agreement between parties, meaning, they are typically enforceable if entrenched within the terms of your title documents.

But here’s where it gets interesting. These covenants aren’t just fleeting obligations; they have staying power. Even if the property changes hands, the covenant often remains intact, binding successors to its terms unless discharged by the beneficiary of the covenant and or not observed by the other residents in the area, making the covenant obsolete or no longer valid.

What if you have breached a restrictive covenant?

So, you’ve inadvertently strayed beyond the bounds of the covenant. What now? Brace yourself for potential repercussions. The owner holding the covenant’s benefit might come knocking, seeking redress for the breach. Their options? Claims for damages to offset the breach’s impact or an injunction to halt the breach in its tracks. These outcomes highlight the importance of diligence in the conveyancing process.

Potential Options to Deal with a Restrictive Covenant

1) Check if the beneficiary exists

You must undertake checks to check who benefits from the covenant. Is the beneficiary alive? Or was it a company that has now liquidated. The implications of breaching a covenant where the beneficiary is not alive or no longer exists may be less severe unless the benefit of the covenant has been sold to a third party.

2) Negotiate

The age-old tool of compromise, can lead to the covenant’s release, liberating you from its constraints. You may be able to enter into a deed of release with the beneficiary, either fre of charge and or by paying a compensatory payment.

3) Indemnity insurance, shielding against covenant enforcement risks.

4) Legal route

If the options set out above do not work, you may be able to make an application to the tribunal who has the discretion to remove it and or modify it pursuant to r s. 84 of the Law of Property Act 1925.

Expert Guidance at Hodge Jones and Allen

Our team of specialist solicitors is adept at reviewing title documents and leases to then provide tailored advice on the associated obligations. Whether you’re considering a purchase or have already acquired a property, our expertise ensures that you navigate the complexities of property law with confidence.

Conclusion

Navigating the complexities of property law, particularly concerning residential property disputes demands expert guidance. At Hodge Jones and Allen, our dedicated Property Dispute team provides invaluable support, ensuring that your rights and obligations are fully understood and protected. The have assisted developers and land owners be discharged and or released from restrictive covenants burdening their land.

Whether you’re a prospective buyer or a seasoned property investor, our legal expertise is your steadfast ally in achieving favourable outcomes. To speak to one of our commercial property disputes experts please call 0330 822 3451 or request a callback.