Restrictive covenants and their implications for home buyers

17th January 2015 by

An aspect of buying some homes, which may not be immediately obvious to a buyer, is the existence of a restrictive covenant on the property. This is an important area of concern to the residential conveyancing solicitor who must report the implications of any such part of the property’s deeds to the purchaser.

A covenant is a technical term for a private agreement between land owners which defines how a site may be used and any possible development restrictions. It can also be known as an encumbrance.

Usually, a restrictive covenant is set up when a piece of land is first sold for homes or other building and is intended by the original owner to retain some control and to protect the benefits of all the surrounding owners.

So long as its conditions are deemed reasonable and capable of being met, the person who draws up the agreement can make whatever conditions he wishes part of a covenant and that the agreement will apply to each successive owner of the land, unless otherwise stated.

Covenants can have expiry dates written into them or become redundant if the seller and/or his heirs dies, goes out of business in the case of a commercial firm, or otherwise is unable to enforce the restrictions.

Sometimes, a mutually-enforceable covenant is drawn up whereby each one of a group of neighbours or owners of land in a particular area can stop any of the others from taking an action which affects their enjoyment of their homes and goes against the conditions of the covenant.

Common clauses in a covenant

Although the person setting up a covenant can insert any clause they wish, the most common ones relate to general living constraints, such as not causing a nuisance to neighbours, only keeping domestic pets and not using the home for any business activity.

In order to maintain a neat appearance on their estates, some developers will not allow fences or other obstructions in the front gardens of homes or stipulate colours of exterior paintwork.
Occasionally, legal agreements will be made as a result of planning approval for a site.

Often a covenant will have a clause forbidding any building or residential development in the garden of a house, although this may only be enacted if the proposed building is completely to the use of the house, and the making of external alterations.

A property lawyer must tell the prospective buyer about the existence of a restrictive covenant and, if he is aware of a possibility of conflict, for example, if a business use is intended, should make the buyer aware of the consequences.

When the contract to buy the house is agreed and signed, it also implies full knowledge and acceptance of the conditions of any covenant by the purchaser.

Solicitor can check validity of old covenant

If a covenant has become null and void and unenforceable, which may happen through the passage of time but it will be up to the solicitor to check its validity, then the new owner can safely ignore the previous impositions and deal with the local authority planning department regarding any changes in structure or use of the building.

A new owner could seek to have the covenant or parts of it rescinded and obtain permission for what they want to do if they are able to trace the person or company which has the beneficial ownership. If this is possible, a charge, at least for legal expenses, is likely to be made.

Apart from obtaining retrospective covenant consent or a deed of variation in order to ease the restrictions of a covenant, the Lands Tribunal has some powers to change or end a restrictive covenant if circumstances have changed such that it is no longer reasonable for it to be enforced.

These procedures are all likely to be quite costly in terms of fees from a specialist property solicitor and time taken.

Another option for a prospective purchaser if they want to be protected from the consequences of breaching a restrictive covenant on their new home is to take out an indemnity insurance policy to cover potential legal or other charges.

Healys solicitors of London and Brighton offers conveyancing experience

The experienced residential conveyancing teams at Healys’ offices in London and Brighton can offer the security of dealing with legal experts who can handle and advise on all issues arising from restrictive covenants on home sales.

Not only do all Healys staff have a helpful attitude in achieving the best result for their clients, with links to other skilled professionals across its general legal practice, it can provide specialist representation on all aspects of property law.

For more information and advice on costs of Healys’ conveyancing services, you can request a call-back via the website, email partner Kiri KKoshi, telephone 020 7822 4148 or associate solicitor Darina Gowen telephone01273 669 115