It’s not uncommon to find properties with so-called ‘restrictive covenants’ attached to them. But what are they, and are they as daunting as they sound?
The answer depends on what the covenant is for. Once you know, it’s usually a lot easier to decide whether it should affect your plans to purchase a property.
So what is a restrictive covenant?
A restrictive covenant is an additional binding clause which appears in the deeds of a property or a sale contract. Simply put, it’s a restriction of use that you must obey when you own the property. This could be anything from not putting a satellite dish on the front of the house to not building a new property in the garden.
Restrictive covenants can be so ancient they’re now irrelevant, but there are plenty of modern ones as well. The most common restrictive covenants tend to fall into one of three categories:
- Covenants designed to stop land being used for commercial purposes (e.g. running a business from the property);
- Covenants to disallow the construction of further buildings or other major structures on the land;
- Covenants to prevent certain property alterations (e.g. extensions, or conversions to turn one home into multiple flats).
Why do restrictive covenants exist?
A lot of modern restrictive covenants are designed to create a more ‘uniform’ feel to a particular street or local area, perhaps to help keep it tidy or protect its value.
For example, a restrictive covenant might ban hedges or fences above a certain height, prohibit the keeping of livestock, prevent the parking of motorhomes in the garden, stop a homeowner allowing a garden to grow wild, or state that a home can’t fall into serious disrepair. And in the case of land for sale, the owner may impose a restrictive covenant designed to maintain a degree of future control, safeguard the value of the plot, or protect the land from certain kinds of damage or environmental deterioration.
Do restrictive covenants only apply to modern properties?
There are lots of extremely old restrictive covenants still in place and as well as making it impossible to build on a certain piece of land, they might ban livestock, prevent you from hanging out washing, or countless number of other things. However, some very old covenants can sometimes become unenforceable if the language is vague or misleading, if the beneficiaries of the covenant can’t be found, if the covenant itself has become obsolete, or if it’s been broken for a number of successive years without complaint. Just make sure you read the small print before you purchase your new home!
What if there’s a restrictive covenant on the home I’m buying?
Even if you’re sure the restrictive covenant is clear, reasonable, and acceptable to you, you should always take legal advice before making any commitment to buy the property.
A solicitor will usually explain that restrictive covenants ‘run with the land’, meaning they won’t only bind you as the new owner, but everyone who owns the property in the future.
Some covenants may also affect the future value of the property – like a restriction preventing home extensions or certain kinds of conversion. In some circumstances, a mortgage lender may think a restrictive covenant has a detrimental impact on the future selling price of the home, leading them to turn down your mortgage application.
What happens if a homeowner breaches a restrictive covenant?
As a property owner breaching a covenant restriction, you could be ordered to take remedial action. This means you’ll have to undo whatever breached the restriction, which could mean demolishing an extension or undoing a conversion.
You might also be required to pay a fee or risk having legal action taken against you. If you’ve been in breach of a covenant restriction for a year or more, and the breach has been unchallenged within that time, then you should be able to obtain a single-premium restrictive covenant insurance which will safeguard your position and indemnify all future owners if you should decide to sell the property.
Can a restrictive covenant be removed?
Where no insurance cover is available, it’s theoretically possible to ask whoever benefits from the covenant to give ‘retrospective consent’ for what has been done.
It may be the case that the person who benefits from the covenant can’t be found, turns down your request, demands compensation, or quotes a large fee.
In these circumstances, you could approach the Lands Chamber to request the restrictive covenant is discharged or modified. There’s no guarantee this will be granted however, and bear in mind that the process is often long and expensive.
