Restrictive covenants and where to find them

14th October 2019

A restrictive covenant refers to a limitation to what an owner can legally do with their property. To help you avoid falling foul of these restrictions, DAS Law’s Bethan Mack gives an overview of covenants and how they work.

What is a restrictive covenant?

Restrictive covenants are restrictions put onto land, usually by previous owners, to prevent people from carrying out certain actions on it. The most common restrictive covenants are;

  • To prevent any building on a section of land;
  • To prevent any business activity on the land; and
  • To prevent owners from making alterations to a property e.g. converting into flats.

If the covenant has been drafted and registered correctly, it can restrict the use of the land for any future buyers or developers and can be used to maintain the character of an area. A landowner may also place a restrictive covenant on the land in an attempt to protect the value of the land.

If there is a covenant on your property that you wish to look into, you should seek legal advice on the issue.

Building extensions and alterations

Many restrictive covenants will have clauses in them allowing alterations or buildings on land as long as the new owner seeks permission of the person that made the covenant, usually the original developer.

If you believe that you have such a covenant on your property the first thing that you will need to do is examine the wording of the covenant to measure its strength and to see if it is enforceable. You will also need to work out who will enforce the covenant if it is broken or who you will need to approach to ask permission to do the work you want to undertake.

The majority of covenants will be enforced by the current owner of the land that the property sits on. However there are occasions when it is the original owner of the land who will need to be approached.

If the covenant requires prior consent for alterations to be made to the property, it will need to be considered whether the alterations are reasonable and thus require consent at all. You will have to ensure that you carefully look over the covenant as they are often vague about the levels of work or alteration that will require consent.

Restrictive covenants on nuisance and annoyance

One of the most common forms of covenant is one which sets restrictions on nuisance and annoyance. These covenants are often included to protect neighbouring land and neighbours. These covenants have been considered to include the building of a house extension, which when built, could cause a nuisance or annoyance.

Restrictive covenant insurance

Legal indemnity insurance can prove useful if you have a restrictive covenant on your property. It can usually offer some type of solution for restrictive covenant issues or at the least some protection if things go wrong. You should ensure that you go over the covenant thoroughly before taking out legal indemnity insurance to check that there are no other options that might be appropriate for your issue.

An example of an occasion in which someone may purchase a restrictive covenant insurance policy is if they want to build on a plot of land, which would be in breach of a restrictive covenant, but they are unable to trace the owner of the covenant to remove it.

Restrictive covenant insurance may assist if the owner of the covenant were to subsequently pursue legal action for the breach. Some properties have titles which state that there is a covenant placed on the building but the paperwork which describes what the covenant is has been lost. In cases such as these, it would be advisable to get restrictive covenant insurance.

An insurance policy of this kind may insure that a claimant will receive damages or compensation, the cost of altering or demolishing the property and the reductions in value of the property between the market value at when the covenant was enforced and what the value would have been on the current open market had it not been enforced. Depending on the policy, restrictive covenant insurance may also cover future owners of the property.

Rights of way and easements

An easement is a right that a person has over some property or land which does not belong to them. Commonly, an easement will be a right of way which allows someone to cross over their neighbours land to get to their property.

The right of way may be expressed in the deeds to the property or the rights may be implied or gained over long standing use. There may be specifications on the right of way, for example it may only give access to pedestrians.

If your property has a right of way running through it but you do not have any legal paperwork defining the terms and conditions of its use, it can be a good idea to draw up an easement in order to clarify the use should it need to be questioned.

An easement will need to be created by writing out a contract using the correct legal terms. If you are planning to create an easement with another party, perhaps a neighbour, it is advisable to meet with them to discuss what rights of way that they wish to use and any restrictions that you may want to place on them. A solicitor will have to draw up the final draft in order to make it legally binding.

Converting a house into flats

A very common restrictive covenant is one that states that a house must only be used as an individual dwelling. This means that it would break the covenant should a new owner wish to renovate the property into flats.

In recent years there has been a drastic shortage in the amount of affordable housing on the market and for this reason, a provision was included in the 1985 Housing Act (Section 610) which made it a lot easier for single dwellings to be converted into flats.

Before this provision was introduced, a person wishing to change a single dwelling into flats would have had to apply to the Lands Tribunal in order to seek to get the covenant lifted. This would have to be supported with the requirements stipulated in Section 84 of the Housing Act 1985.

Section 610 could be put into play once planning permission had been granted to turn the property from a single dwelling to one of multiple dwellings. The court would look at the leasehold or freehold of the building and decide whether to change the covenants that were put in place if they believe it is fair to do so.

This type of application would also be appropriate if it can be proven that the property in question is in an area which has changed and would thus be more likely to be let out if it was converted to a multiple dwelling.

This loophole can be particularly useful for developers that are worried they will be unable to convert a single dwelling into flats due to a covenant being in place.

Disclaimer: This information is for general guidance regarding rights and responsibilities and is not formal legal advice as no lawyer-client relationship has been created. Note that the information was accurate at the time of publication but laws may have since changed.

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