166 thoughts on “Restrictive covenants on property”
I live in a neighborhood with a restrictive covenants. The developer stated he was okay how we utilize our property as long as the Village is okay with it. Is the developer able to make modifications to the restrictive covenants if they no longer own majority of the lots or who is able to make the changes?
One of the ways to dispose of a restrictive covenant is to come to an express agreement with the beneficiary of it. The beneficiary of it will be the owner (or owners) of the dominant land (the land which benefits from the restriction). A release or variation of the restrictive covenant is always possible between the parties but often the beneficiary will want something in exchange (normally money), however, you could get lucky.
It is important to check who the beneficiary of the restrictive covenant is, this should be reasonably clear from the wording of it. It is not unusual for developers to put in place restrictive covenants that not only benefit them whilst they sell off the properties, but which will benefit all future owners. It might therefore be the case that there are quite a few beneficiaries to consider and reach an agreement with. It is extremely important to do this.
By way of example as to how important it is to check who the beneficiaries of a restrictive covenant are, we also specialise in professional negligence claims. We were instructed by a property owner to pursue a claim against their previous solicitor. Our client had wanted to build a second dwelling on their plot but there was a restrictive covenant saying that only one dwelling was allowed. Our client paid the developer to release them from the restrictive covenant and the solicitor at the time failed to point out to the client, before parting with a fairly significant sum, that the local residents association also benefitted from the restrictive covenant. This was even stated in the wording of the restriction itself! Building work started and our client, having spent a small fortune to date, came close to being injuncted (legally “prevented”) from continuing and even demolishing what had been built so far. Needless to say the claim against the solicitor was successfully settled in favour of our client. The moral of the story is to consider in detail who might be able to enforce a restrictive covenant before deciding to risk potentially breaching it.
If an agreement is reached with the beneficiary of the restrictive covenant, then it will need to be recorded at the Land Registry. An agreement between the parties to release, vary or not enforce a restrictive covenant will be personal to the parties that agree this. Unless this agreement is registered with a suitable deed at the Land Registry, it will not bind future successors in title (i.e. the future owners of the property. Whilst fine for the time being, when it comes to sell the servient land (that is the land subject to the restrictive covenant) a buyer might be put off knowing that there is a breach of it which might in the future be enforced.
I am in the middle of buying a house. I want to convert it to a HMO. There is a covent saying that it is only allowed to be used as a single family dwelling home. Can I get around this.
We cannot give specific advice on our website. In terms of broad and general guidance, whether or not a restrictive covenant is enforceable or continues to apply depends on a whole host of matters. What we would say is that if this is your firm and settled intention, you should obtain legal advice on the point before you commit to purchase the property. You might want to also consider approaching someone that can advise on planning issues, as sometimes a local authority will have to grant a licence.
Turning back to restrictive covenants, it also isn’t the case that there is always a clear “yes” or “no” answer. More often than not the restriction in question and ability to “get around it” is a matter open to debate. Once a restrictive covenant is created, the basic position is that it will bind the owner of the servient land forever. Sometimes these become obsolete, however. A proper consideration of all the facts is necessary but the fundamental question is always what it was that the restrictive covenant intended to protect when it was created and is that requirement still there.
We have been in the process of purchasing a house for almost a year now. It has been hell!! The seller is splitting the land into 3 parts. The garage is being converted into a small bungalow, we are buying the main house with half an acre and the owner is giving her daughter the rest of the land (around quarter of an acre). The whole process has been a joke the entire way through, as the seller first of all wants to sell all 3 parts at the same time, so we have had to wait for a buyer for the barn. Next up, the house is on a part of land that the buckland estate owns (buckland estate own acres and acres of land around these parts), so we have been told that we have to wait for the deed to be updated and then approved by land registry then signed by the estate and their entire family (20+ members) before we can complete. Now I’ve spoken to land registry and they have informed me that their lawyers seem to think that we shouldn’t actually need to wait for the deed to be changed before we can complete our part of the purchase, so I put this to our seller and she said “As I understand it all, as the deed carries the ‘single dwelling covenant removal’, which is why we have had to wait.” Is this correct? Or are they speaking rubbish and legally we can indeed complete without having to wait for the deed to be approved by land registry? Bearing in mind land registry have had these 3 applications since last July and they still haven’t completed them!! I would like some clarity on this, as the seller and her solicitor haven’t been very clear or helpful at all with this entire sale. I have a feeling that we are being made to wait for this all, as she still wants to complete everything at the same time, as it will save her in tax. Another point, was that back in September, we were told that the sellers solicitor would change the TR1 to a TP1 so we could complete without having to wait for someone to buy the barn. So being lead to believe, if we paid the £600 to update the TR1 to a TP1 we would rapidly speed up the process of our purchase and be able to move very soon after. A few weeks later the seller found a new buyer for the barn and change it back to a TR1 without informing us and since then we’ve been told that we have to wait for the deed to be changed and approved before we can complete. So I’d simply like to know if we do actually need to wait for the deed to be changed? Does the single dwelling covenant removal affect us from continuing with the purchase? Or should we be ok to exchange and complete whilst the rest can be updated after we complete? Thanks
We really can’t provide even general advice that might be relevant without knowing a lot more and considering all of the documentation involved.
In short, you can exchange and complete on a purchase whenever the parties want. This is a contractual matter between the parties. However, there might be a problem with the title to the property which prevents you from being registered as the legal proprietors, or a right for a third party that would be binding on you if it is not dealt with first. The job of a buyer’s solicitor is to provide their client with enough information and explanation that their client can make an informed decision about what to do.
We don’t really understand how a TR1 could be used to transfer part of a title (i.e. a parcel of land) to a buyer. When a title is being “split” a TP1 is normally the correct Land Registry form to use.
If you haven’t exchanged contracts, then it is extremely unlikely that you would have any contractual right to force the seller to get on with things. Unless a contract exists in some form, which it probably doesn’t, neither a buyer or seller would have any contractual rights against the other.
You do sound unsure of the position. If your solicitor is not explaining things to you clearly, enabling you to make informed decisions, then might be doing something wrong. The job of a solicitor is to explain
things to their client in clear terms. You should definitely ask your solicitor for input and if you are still unclear, ask for someone more senior to explain.
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I live in a neighborhood with a restrictive covenants. The developer stated he was okay how we utilize our property as long as the Village is okay with it. Is the developer able to make modifications to the restrictive covenants if they no longer own majority of the lots or who is able to make the changes?
Thank you for your comment.
One of the ways to dispose of a restrictive covenant is to come to an express agreement with the
beneficiary of it. The beneficiary of it will be the owner (or owners) of the dominant land (the land
which benefits from the restriction). A release or variation of the restrictive covenant is always possible
between the parties but often the beneficiary will want something in exchange (normally money),
however, you could get lucky.
It is important to check who the beneficiary of the restrictive covenant is, this should be reasonably
clear from the wording of it. It is not unusual for developers to put in place restrictive covenants that
not only benefit them whilst they sell off the properties, but which will benefit all future owners. It
might therefore be the case that there are quite a few beneficiaries to consider and reach an agreement
with. It is extremely important to do this.
By way of example as to how important it is to check who the beneficiaries of a restrictive covenant are,
we also specialise in professional negligence claims. We were instructed by a property owner to pursue
a claim against their previous solicitor. Our client had wanted to build a second dwelling on their plot
but there was a restrictive covenant saying that only one dwelling was allowed. Our client paid the
developer to release them from the restrictive covenant and the solicitor at the time failed to point out
to the client, before parting with a fairly significant sum, that the local residents association also
benefitted from the restrictive covenant. This was even stated in the wording of the restriction itself!
Building work started and our client, having spent a small fortune to date, came close to being injuncted
(legally “prevented”) from continuing and even demolishing what had been built so far. Needless to say
the claim against the solicitor was successfully settled in favour of our client. The moral of the story is to
consider in detail who might be able to enforce a restrictive covenant before deciding to risk potentially
breaching it.
If an agreement is reached with the beneficiary of the restrictive covenant, then it will need to be
recorded at the Land Registry. An agreement between the parties to release, vary or not enforce a
restrictive covenant will be personal to the parties that agree this. Unless this agreement is registered
with a suitable deed at the Land Registry, it will not bind future successors in title (i.e. the future owners
of the property. Whilst fine for the time being, when it comes to sell the servient land (that is the land
subject to the restrictive covenant) a buyer might be put off knowing that there is a breach of it which
might in the future be enforced.
I am in the middle of buying a house. I want to convert it to a HMO. There is a covent saying that it is only allowed to be used as a single family dwelling home.
Can I get around this.
Please advise
Thanks
Thank you for your comment.
We cannot give specific advice on our website. In terms of broad and general guidance, whether or not
a restrictive covenant is enforceable or continues to apply depends on a whole host of matters.
What we would say is that if this is your firm and settled intention, you should obtain legal advice on the
point before you commit to purchase the property. You might want to also consider approaching
someone that can advise on planning issues, as sometimes a local authority will have to grant a licence.
Turning back to restrictive covenants, it also isn’t the case that there is always a clear “yes” or “no”
answer. More often than not the restriction in question and ability to “get around it” is a matter open
to debate. Once a restrictive covenant is created, the basic position is that it will bind the owner of the
servient land forever. Sometimes these become obsolete, however. A proper consideration of all the
facts is necessary but the fundamental question is always what it was that the restrictive covenant
intended to protect when it was created and is that requirement still there.
Good morning,
We have been in the process of purchasing a house for almost a year now. It has been hell!! The seller is splitting the land into 3 parts. The garage is being converted into a small bungalow, we are buying the main house with half an acre and the owner is giving her daughter the rest of the land (around quarter of an acre). The whole process has been a joke the entire way through, as the seller first of all wants to sell all 3 parts at the same time, so we have had to wait for a buyer for the barn. Next up, the house is on a part of land that the buckland estate owns (buckland estate own acres and acres of land around these parts), so we have been told that we have to wait for the deed to be updated and then approved by land registry then signed by the estate and their entire family (20+ members) before we can complete. Now I’ve spoken to land registry and they have informed me that their lawyers seem to think that we shouldn’t actually need to wait for the deed to be changed before we can complete our part of the purchase, so I put this to our seller and she said “As I understand it all, as the deed carries the ‘single dwelling covenant removal’, which is why we have had to wait.”
Is this correct? Or are they speaking rubbish and legally we can indeed complete without having to wait for the deed to be approved by land registry? Bearing in mind land registry have had these 3 applications since last July and they still haven’t completed them!! I would like some clarity on this, as the seller and her solicitor haven’t been very clear or helpful at all with this entire sale. I have a feeling that we are being made to wait for this all, as she still wants to complete everything at the same time, as it will save her in tax. Another point, was that back in September, we were told that the sellers solicitor would change the TR1 to a TP1 so we could complete without having to wait for someone to buy the barn. So being lead to believe, if we paid the £600 to update the TR1 to a TP1 we would rapidly speed up the process of our purchase and be able to move very soon after. A few weeks later the seller found a new buyer for the barn and change it back to a TR1 without informing us and since then we’ve been told that we have to wait for the deed to be changed and approved before we can complete. So I’d simply like to know if we do actually need to wait for the deed to be changed? Does the single dwelling covenant removal affect us from continuing with the purchase? Or should we be ok to exchange and complete whilst the rest can be updated after we complete? Thanks
Thank you for your comment.
We really can’t provide even general advice that might be relevant without knowing a lot more and
considering all of the documentation involved.
In short, you can exchange and complete on a purchase whenever the parties want. This is a contractual
matter between the parties. However, there might be a problem with the title to the property which
prevents you from being registered as the legal proprietors, or a right for a third party that would be
binding on you if it is not dealt with first. The job of a buyer’s solicitor is to provide their client with
enough information and explanation that their client can make an informed decision about what to do.
We don’t really understand how a TR1 could be used to transfer part of a title (i.e. a parcel of land) to a
buyer. When a title is being “split” a TP1 is normally the correct Land Registry form to use.
If you haven’t exchanged contracts, then it is extremely unlikely that you would have any contractual
right to force the seller to get on with things. Unless a contract exists in some form, which it probably
doesn’t, neither a buyer or seller would have any contractual rights against the other.
You do sound unsure of the position. If your solicitor is not explaining things to you clearly, enabling you
to make informed decisions, then might be doing something wrong. The job of a solicitor is to explain
things to their client in clear terms. You should definitely ask your solicitor for input and if you are still
unclear, ask for someone more senior to explain.