Guide to Restrictive Covenants on Property

Restrictive covenants on property are important legal agreements that can affect not only the parties signing them, but also the parties that purchase or inherit property with restrictive covenants. In some circumstances, these agreements are enforceable in Court, so it is essential that owners be aware of the power of restrictive covenants on property, and understand the legal repercussions for breaching them.

What are restrictive covenants?

In it's simplest terms, a covenant is a solemn promise to engage in or refrain from a specified action. With regards to property, estrictive covenants are binding agreements entered into voluntarily by landowners, establishing certain restrictions on the land. When drafted correctly, they impose limitations to property owners, preventing them from altering the land or performing certain actions. These covenants may be included in the title of the property and run with the land, not with the parties that entered into the agreement. This means that a covenant will still be valid even after one or both of the parties passes away or sells the land. In addition, restrictive covenants on property may be enforced even if they seem antiquated. Restrictive covenants are always negative, forbidding actions such as renovations or extensions without obtaining the consent of the covenant beneficiary. As a result, the value of the land may be affected due to the restrictive covenants placed upon it.

Restrictions on conversions and alterations

One of the most common clauses included in property covenants is the restriction to modify or extend the building in any way, without having permission from the author of the covenant or from its beneficiary. This can be an unpleasant situation for new property owners, because they have to establish contact with the original or previous owner. If your property is under a covenant and you would like to alter it, you should start by asking a specialised solicitor to interpret the wording of the covenant. In some cases, restrictions are expressed in vague language, making it difficult to understand what classes as reasonable alterations that do not require permission.

Restrictions for nuisance and annoyance

Another clause that owners frequently include in property covenants is the restriction on nuisance and annoyance, mostly to protect neighbours. For example, if you want to build an extension to a house, your neighbour could object and invoke a nuisance. The most relevant example in this situation is the case Dennis vs. Davies [2008]. Dennis objected to Davies building three storeys to his house and invoked a nuisance covenant. Although the covenant did not specifically prohibit Davies from altering the property, the Court ruled in favour of Dennis, because the erection of three new stories would have prevented Dennis' view of the river Thames, thus affecting his life in a negative manner.

Restrictions on converting a house into flats

The provisions in the Housing Act 1985 made it easier for British citizens to convert single dwellings into flats, thus coming as a much-awaited solution to the rising prices on the property market. However, the process of converting a house into a flat can become more complicated if the house in question has a restrictive covenant preventing the new owner from such action.

In this case, owners wishing to convert have two options:

• Establish contact with the author of the covenant and obtain permission to carry out the conversion; 
• Submit an application to have the covenant lifted.

Requirements for restrictive covenants on property

Inclusion in the title of the property does not guarantee the enforceability of restrictive covenants on property. In order for them to be valid, they must respect the following requirements:

• They must establish one or more restrictions on the land; 
• They must have been intended to run; 
• The land mentioned in the covenant must exist; 
• For covenants created before January 1, 1926, the successor of the land affected by the covenant must receive notice of the covenant. For covenants created after this date, registration of the covenant will suffice.

If your property is affected by a restrictive covenant and you suspect that it does not comply with the above requirements, you should seek legal assistance from a property law solicitor to determine its validity.

How to protect yourself against covenant breach

Owning property that is affected by a restrictive covenant can be both unpleasant and unpractical, and you might feel that your freedom to build the living space you need is being limited. However, such a covenant should not be ignored, because its beneficiary can file for damages and you may have to cover for the decrease in value incurred by the breach.

To prevent such complications, it is advisable that you seek protection from breaching the covenant. This can be done by two means: you can either obtain indemnity insurance, or request a declaration of invalidity from the Lands Tribunal. Choosing the right course of action varies from case you case, but, in general, it is more affordable and less time consuming to get indemnity insurance. Please note that this insurance is not available in all situations and that, for best results, you should discuss your particular case with a professional solicitor, who can provide you with bespoke advice.

Applying for discharge or modification of restrictive covenants

Applying for discharge or modification of restrictive covenants may be beneficial when you have concluded that insurance is not advantageous in your case. The right to file an application to the Lands Tribunal for this reason is established under the Law of Property Act 1925, Section 84. The Tribunal may lift or modify the restrictive covenant if it meets one or more of the following requirements:

• The restrictive covenant is antiquated; 
• The restrictive covenant provides no practical advantage to public or private users; 
• The beneficiary of the restrictive covenant has already agreed that it be lifted or modified; 
• The beneficiary of the restrictive covenant would not be affected by the discharge or modification.

What should be included in the application:

• Information regarding the land affected by the covenant, including plans of the land; 
• The identity of all the persons benefiting from the covenant; 
• Reasons why the applicant believes the restriction should be lifted or modified;