Restrictive covenants are found in the majority of title deeds for properties in the UK. Generally, owners are unaware of the restrictive covenants that affect their property (or even what they are) and are consequently at risk of breaching them. This can cause problems when you come to sell the property in the future and/or leave you at risk of legal action from those with the benefit of the covenants. Here we explain what covenants are and some common examples and issues to look out for.
What are they?
Covenants are rules affecting the way a property can be used and are usually written into the title deeds when a house is built. Restrictive covenants, as the name suggests, restrict you from doing or allowing to be done certain things on your property. Typically, covenants are intended to maintain the character of the area and are imposed by developers to ensure uniformity. They may also be imposed when someone is transferring part of their property to another person. For example, if someone was selling off part of their garden, they may want to ensure the purchaser only builds one property to a certain specification to be approved by the seller prior to construction. Legal action can be taken against an owner of property who contravenes these rules.
Common restrictive covenants
Some examples of common covenants include restrictions such no alterations to the property without consent, not to park caravans or commercial vehicles on the property, not to erect satellite dishes, not to cause a nuisance or annoyance to neighbours, limitations on the number and/or type of animals that can be kept at the property, not to use the property for any trade or business. These are just to name a few and some covenants even go as far as to say the owner must not play musical instruments or sing at certain times of the day!
Although the more historic type of covenants, such as those restricting the sale of ‘intoxicating liquor’ or preventing the property being used for the trade of ‘a melter of fat slaughterer tallow chandler soap boiler’ may no longer seem relevant, some may inhibit the intended use of the property. Consideration of restrictive covenants can be especially important if you are intending to use your property as an Airbnb or holiday home. You should always make sure you check the covenants as well as checking with your Local Authority that there are no planning restrictions which may prevent you from renting your property out commercially.
How do I know which covenants affect my property (if any)?
You should be made aware of the covenants that affect the property you are purchasing at some point during the Conveyancing process. You should ensure you understand these and can comply with them. You should also ensure you notify your Conveyancer if you are aware of any potential breaches of covenants by the current or previous owners which may not be obvious to your Conveyancer, having not physically inspected the property. For example, if there is a covenant not to erect any other buildings and there are some outbuildings at the property not apparent from the estate agent’s brochure. This is especially important if there are no estate agents involved or the brochure is limited.
If you want to check the restrictive covenants affecting a property you already own, you may be able to identify the restrictive covenants yourself by looking in the ‘Charges Register’ (registered land only) of the title document. We would always recommend these are double checked before undertaking any alterations or additions to your property. Ask you Solicitor if you are having trouble locating them and they should be able to assist.
Covenants relating to extensions and alterations to the property
In many circumstances you need to obtain consent from the original developer, the Local Authority or the Freeholder if the property is Leasehold. This can relate in particular to any additions or alterations to the property. It is important that consent is obtained prior to the commencement of any works as if consent is not obtained, not only could you be opening yourself up to potential legal action and/or being prevented from carrying out or completing your planned work, in any event, it could lead to a delay on any subsequent sale.
Often people mistakenly think that if they have consent from the Local Authority for planned works (i.e. planning permission), they don’t need any other consent. This is incorrect and you should check your deeds carefully to ensure that covenant consent is not required. If there is such a covenant, the necessary consent must be obtained whether or not you have obtained planning permission.
What if there has been a breach?
In certain circumstances indemnity insurance policies are available to cover you and your lender (if applicable) against financial losses suffered as a result of someone trying to claim the benefit of any restrictive covenants and enforcing the covenants against you. You should speak to your Conveyancer or Solicitor for more information on indemnity policies. It is usual for the Seller to cover the cost of these policies if there has been a breach of a restrictive covenant on a property you are purchasing.
Contact us
Contact our Conveyancing team today to find out how we can help, or to ask us about our conveyancing fees, by calling 0808 1685 643, fill out an online enquiry form, or email getmoving@ramsdens.co.uk and we will be in touch.