When you buy a property, you’re not just buying bricks and mortar, you’re also taking on whatever legal obligations are attached to the land. Restrictive covenants are one of the most common examples, and they can catch buyers out if they aren’t properly checked before exchange of contracts. Understanding what they are, and what to do if one affects your purchase, is an important part of the conveyancing process.
What is a restrictive covenant?
A restrictive covenant is a legal obligation that limits what an owner can do with their land. It’s usually created when land is sold or divided, with the seller imposing conditions that continue to bind future owners, not just the original buyer. Covenants are recorded on the title register or in older title deeds.
Common examples of restrictive covenants
- No using the property for business purposes
- No building further structures without the benefiting party’s consent
- No keeping certain animals, such as pigs or poultry
- No parking commercial vehicles on the property
- No subdividing the plot or building additional dwellings
How are covenants discovered during conveyancing?
Your solicitor will identify restrictive covenants by examining the title register and any historic conveyances referred to in it. Older covenants, sometimes a century or more old, can still be enforceable, even if they now seem unusual or impractical.
What happens if a covenant is breached, or might be?
If your intended use of the property conflicts with an existing covenant, for example, you’re planning an extension and the covenant restricts new building work, this needs to be addressed before you exchange contracts. Depending on the situation, your solicitor may recommend:
- Seeking formal consent from the party who benefits from the covenant
- Arranging restrictive covenant indemnity insurance, which protects against the risk of enforcement rather than resolving the underlying issue when you are aware that the covenant has already been breached
- Applying to the Upper Tribunal (Lands Chamber) to have an outdated covenant modified or discharged, in more complex cases
Why this matters for buyers
An unresolved issue with a restrictive covenant can affect your ability to get a mortgage, cause problems if you later want to extend or alter the property, and create complications when you come to sell. Because covenants aren’t always obvious just from looking at a property, this is exactly the kind of risk that a thorough conveyancing search and title review is designed to catch.
Frequently Asked Questions About Restrictive Covenants
Can a restrictive covenant be removed?
In some cases, yes. It may be possible to obtain a release or formal consent from the party who benefits from it, or, where a covenant is outdated or no longer relevant, to apply to the Upper Tribunal (Lands Chamber) to have it modified or discharged.
What is restrictive covenant indemnity insurance?
It’s a policy that protects against the financial risk of a covenant being enforced. It doesn’t remove the covenant or resolve the underlying issue, but it can provide reassurance to buyers and lenders where the risk of enforcement is considered low.
Will a restrictive covenant stop me getting a mortgage?
It can, particularly if your lender is concerned about a covenant restricting the future use or value of the property. This is one of the reasons it’s important for your solicitor to identify and address any covenants before exchange.
Do restrictive covenants expire?
Not automatically. Many covenants continue indefinitely unless they are formally released, modified or found to be unenforceable, even if they were created a long time ago.
How Oliver & Co Solicitors Can Help
Whether you’re buying a new home or a property with a more complicated title history, our Conveyancing team will check for restrictive covenants and other title issues so that nothing catches you by surprise. Contact us today on 01244 312306, email law@oliverandco.co.uk or complete our Contact Form and we’ll be in touch.
