Restrictive Covenants Explained

When buying a property in the UK, you might encounter a term known as a restrictive covenant. Understanding what these covenants are, their purpose, and the possibilities of challenging or changing them is essential for prospective homeowners and property investors alike. This article delves into the world of restrictive covenants, providing clarity on their implications and guiding you on your journey to making informed property decisions.

What Are Restrictive Covenants?

A restrictive covenant is a legal obligation imposed in a deed by the seller upon the buyer of the property. Essentially, it is a restriction on the use of the land or property, designed to benefit other properties or the land surrounding it. These covenants are binding and can dictate various aspects of property use, ranging from building extensions to business operations conducted on the premises.

For instance, a covenant might prohibit building any structure that obstructs a neighbour’s view or restrict the types of businesses that can operate on the property. The aim is to maintain the character of an area, ensure privacy, or uphold certain standards within a community.

Why Are Restrictive Covenants Used?

Restrictive covenants serve several purposes, primarily to protect the value and enjoyment of neighbouring properties. Here are some common reasons for their use:

• Preservation of Neighbourhood Character: They help maintain the aesthetic and character of a neighbourhood by controlling the types of modifications and activities that can occur.
• Protection of Property Values: By restricting undesirable changes or activities, covenants can help preserve property values.
• Ensuring Privacy and Quiet Enjoyment: Restrictions on businesses or certain activities help ensure that residential areas remain quiet and private.
• Environmental Protection: Covenants can also be used to protect trees, green spaces and other environmental features.

Can Restrictive Covenants Be Challenged or Changed?

While restrictive covenants are legally binding, there are circumstances where they can be challenged or modified. Here’s how:

• Obtaining Consent: In some cases, the party that benefits from the covenant (often a neighbour or the original developer) may agree to lift or modify the restriction. This usually involves legal negotiations and possibly financial compensation.
• Legal Challenge: If a covenant is outdated or no longer serves a useful purpose, it may be possible to challenge it in court. The court will consider whether the covenant continues to provide a real benefit to the property it was intended to protect.
• Upper Tribunal (Lands Chamber): In the UK, you can apply to the Upper Tribunal (Lands Chamber) to have a restrictive covenant modified or discharged if it can be shown that the covenant impedes reasonable use of the property, provides no practical benefit, or if the conditions in the area have changed significantly since the covenant was imposed.
• Insurance: For covenants that are difficult to challenge, homeowners sometimes take out restrictive covenant insurance. This can provide financial protection if the covenant is breached and the beneficiary takes legal action.

Common Examples of Restrictive Covenants

To illustrate the scope of restrictive covenants, here are some common examples:

• Building Restrictions: Prohibiting the construction of certain types of buildings or extensions.
• Usage Restrictions: Preventing the use of the property for specific activities, such as operating a business.
• Alteration Restrictions: Restricting alterations that might change the appearance or structure of the property.
• Environmental Protections: Protecting trees, hedges, or other natural features on the property.

The Process of Dealing with Restrictive Covenants

If you encounter a restrictive covenant, it’s essential to follow a systematic approach:

1. Review the Deed: Carefully read the property deed to understand the specifics of the covenant.
2. Seek Legal Advice: Consult with a solicitor who specialises in property law to evaluate the covenant’s implications and explore options for modification or removal.
3. Negotiate with Beneficiaries: If possible, negotiate with the beneficiaries of the covenant for a potential modification or release.
4. Consider Legal Action: If negotiations fail, consider challenging the covenant through the legal channels available, such as the Upper Tribunal (Lands Chamber).
5. Insurance: Assess the feasibility of taking out restrictive covenant insurance for added protection.

Understanding restrictive covenants is crucial for anyone involved in buying or developing property. These covenants can significantly impact your property use and value. If you find yourself facing restrictive covenants, seek professional advice to navigate your options effectively.