In the latest Brady Solicitors expert view piece, we take a look at the topic of restrictive covenants.
What is a restrictive covenant?
A restrictive covenant is a promise by one person to another (such as a buyer of land to a seller) not to do certain things with the land or property.
Typical restrictive covenants
The possibilities are endless, but some of the most common promises that we come across are:
- Not to build a certain number of properties
- Not to build a certain type/style of property
- Not to run a business from the property
- Not to allow hedges to grow to a certain height on the property
- Not to keep any animals on the property
Are restrictive covenants important?
Absolutely! If you purchase land that is subject to a restrictive covenant, the benefiting party may be able to obtain a court injunction against you, ordering you to stop the restricted activity.
For property developers, this could have significant financial consequences; in certain circumstances a development may be permitted by the court, but a compensatory award of damages may be ordered instead.
Conversely, if you are set to benefit from a restrictive covenant, early awareness of your rights can best protect your land and strengthen your negotiating hand.
How do I know if there is a restrictive covenant?
They can usually be found in public documentation held at the Land Registry and/or by examining old title deeds for the land or property.
Are restrictive covenants enforceable?
Generally, yes, especially between the original contracting parties. They can also be enforceable by one party’s successors in title (i.e. those who have resultantly purchased the property).
Where the person seeking to enforce the covenant and the owner of the burdened land are both successors in title, there are several important pre-conditions that must be met for the covenant to be enforceable. Legal advice is essential to make sure that the pre-conditions are satisfied.
If I am subject to a restrictive covenant what can I do? Is that it?
Not entirely. You are perfectly entitled to negotiate a release from the party who retains the benefit. Ordinarily they will demand some form of compensation to do this.
In the absence of agreement or an insurance policy taken to protect against a claim made against you, an application can be made to the Upper Tribunal (Lands Chamber) for the modification or discharge of the restrictive covenant. There is still the possibility that the Tribunal either upholds the enforceability of the restrictive covenant, or orders the modification or discharge subject to compensation being paid.
Specialist restrictive covenants advice
This area of law is, at times, unavoidably complex and can cause lengthy and costly disputes. An early assessment of the merits of your claim, whether you believe you benefit from a restrictive covenant or whether you suspect you are subject to one, is, in our view, absolutely essential.
At Brady Solicitors, we have experience of representing parties on both sides of the argument.
If you would like to discuss your position, please contact us on 0115 985 3450 or by email.