166 thoughts on “Restrictive covenants on property”
I own a property with a large garden and would like to sell off part of my garden as a building plot but my deeds have a restrictive covenant stating “not more than one house shall be built on any lot” This is a covenant that was put in place in 1935 by the vendors of the land and the building developers. If I go ahead and obtain planning permission will a potential purchaser need indemnity insurance regarding the covenant?
Just because part of the land that a restrictive covenant applies to is sold does not mean that the restriction will not continue to apply to each part of the land. Obtaining planning permission will also not have any real effect on matters. The Local Authority is charged with implementing and ensuring observance of planning regulation. It is not generally interested in legal issues restricting the use of the land.
Insurance might be available for a buyer that wants to build on the land, but it would likely depend on a number of factors. One important aspect of such indemnity insurance is normally the extent to which the beneficiary of the restrictive covenant has been put on notice of any breach or otherwise contacted. Most of the time, an insurer would think twice about issuing a policy when the beneficiary has been contacted or is aware of matters. Even if a policy is issued, a buyer and their mortgage lender (if any) would have to be satisfied with the terms of that policy and the circumstances generally before deciding whether or not to proceed. Of course, a buyer does not “need” insurance per se. They may be prepared to take a risk and proceed without it. On the assumption that the restrictive covenant is noted against the title of the land, then the buyer’s solicitor will almost certainly identify this and advise their client as to its existence.
It should also be noted that a rare exception to the “buyer beware” rule when it comes to property transactions, is that a seller is required to disclose “latent defects in title”. A failure to do this can result in a misrepresentation claim against the seller later, when the issue is discovered (if for some reason it is missed by the buyer when considering whether or not to enter into the contract to purchase the land). The requirement to disclose title defects was explained in the case of SPS Groundworks & Building Ltd v Mahill [2022]. In that case, an overage agreement existed and details of it were included in the auction pack, but the seller did not check this. Despite the auction brochure saying that the seller should read the auction pack, the Court held that this was not sufficient to discharge the seller’s duty to disclose the existence of the title defect. A title defect is broadly anything which has a negative impact on the legal rights of the owner of any property or land that cannot be discovered with reasonable inspection. Whilst this case is arguably restricted to just auction sales, the principles do apply generally, so caution is advisable if there is a defect or encumbrance, especially one that might not be readily identifiable.
Hello, my brother and I recently inherited a property jointly from our mother. Unfortunately the deeds have become lost. We have the previous owners deeds however and there is a successive restrictive covenant on part of the land, limiting building and business use for 80 years. We are 50 years into that timeframe. The current owner is now very elderly and seriously incapacitated and not expected to last very long. Her 3 children have said they would be prepared to sign a ‘deed of release’ for the covenant when their mother dies as they no longer live locally and plan to sell all their mother’s land land soonest, when she passes away. How would I go about accurately drafting/wording such a thing for them to sign and when would I need to get them to sign it? When they are her executors, or as owners? Would I need a legal witness and would this then legally remove the restrictions from our property please? Timing presumably would be crucial also?
The first thing to check is the extent to which the restrictive covenant is binding. This will depend on the date when it was made and whether or not it can be said that when the property was purchased, it was brought to the attention of the buyer.
On the assumption that it is binding (which it probably is if you are aware of it), an express release from a restrictive covenant is always best. This can only be agreed between the current owners of the dominant and servient land. If the current owner passes away, and it is in the interests of their estate to do so (bearing in mind that the value of the dominant land can be negatively impacted by the agreement to release a restrictive covenant benefitting it – which is often one of the reasons why a financial incentive is often demanded) then it would be something the deceased owner’s personal representatives could agree, subject to having the authority to do so (normally a grant of probate or letters of administration).
Such a release is rarely a complicated document to prepare. It must always be by deed (as property rights need to be dealt with in this way generally) and for a deed to be effective, it must be properly witnessed.
The deed would then be registered at the Land Registry. It also does not “remove” the restrictive covenant. What the Land Registry will do is record the deed on the tittle to the property with a wording along the lines of “by a deed dated xxx made between xxx and xxx, the restrictive covenant referred to at entry xxx was purported to be released”. Once a restrictive covenant is recorded against the title to a property, it stays there for ever, but the deed of release can be relied on as proof that it is no longer enforceable.
Hello, we own some land next to our house, there is a restrictive covenants as follows:
The right to pass and repass with or without vehicles at all times over any such accessway designated from time to time by the Transferor and which falls within the Retained Land as affords access to and egress from the Property to the nearest public highway for the purposes of using the Property as garden land in connection with the Transferees ownership of the adjoining residential dwelling.
With it stating use as garden land, would that mean we could not build a dwelling on the land? Thanks
We cannot provide specific advice on our website, not least because we would need to consider the title deeds in particular and what has occurred in practice before forming a view of matters.
What we can say is that if a right over property exists and the person that owns that property is proposing to interfere with that right in some way, then this can lead to arguments and problems. In broad terms, if a person benefits from a right of way over land, to effectively take that right of way is not going to be pleased about this and could devalue their own property.
What appears to be your query is whether or not by reason of the fact that the right of way leads to land defined as “garden” whether or not it means that the land can only be used as garden land. As mentioned, we cannot be specific about this, but it strikes us that a description of a piece of land in title deeds might be relevant when it comes to considering some aspects of the use of the land but fundamentally, if there is no restrictive covenant or other right precluding the building on the land in some way, then the fact that it might have historically and to date been a garden is unlikely to mean that it cannot be built upon. As mentioned, we would have to consider the title deeds and history of use before forming a view on this.
Hello, we purchased a freehold house last year and had to agree to a deed of covenant with an estate management company. We pay them regularly for maintaining the general housing estate area but we really see them. Most of the residents feel its a con. Is there any recourse we can take? A fence next to the dual carriageway was has been broken for months now, and I previously had to chase down the removal of a skip from outside my home after they left it there for months. The latter they claimed they denied any knowledge of works on our street despite sending us a headed letter warning of us the works! Considering 60 houses are paying them for this shoddy service seems like a large swindle to me!
This sounds like an estate rentcharge, which is different to a restrictive covenant. An estate rentcharge is a sum payable to someone for the provision of services. It is more of a positive covenant in that it requires the covenantor to do something (i.e. pay towards the services).
Rentcharges are something that mortgage lenders are not generally happy about and can therefore have an impact on the saleability of a property. This is because if a rentcharge is not paid, the rentowner has statutory certain enforcement procedures which are considered “draconian”. This includes being able to create a leasehold interest over the freehold property. This is a point your conveyancing solicitor should have advised you about but the chances are that this particular rentcharge is “acceptable” because certain variations to the default statutory position have been agreed historically. Therefore, even if you think that the services are not being properly provided, do think twice and get legal advice before even considering withholding payment.
In terms of what can be done if a rent owner (this is the person to whom the rentcharge is paid) is not providing their services, this is not an easy question to answer but in short, there is not much that can be done. This is something the Government recognises and has pledged to help freehold owners with. On November 2023 the Government indicated that it would, when there is sufficient Parliamentary time, look at providing homeowners subject to a rentcharge the ability to challenge the charged or replace the rent owner. More information can be found here: Freehold estates – GOV.UK (www.gov.uk)
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I own a property with a large garden and would like to sell off part of my garden as a building plot but my deeds have a restrictive covenant stating “not more than one house shall be built on any lot”
This is a covenant that was put in place in 1935 by the vendors of the land and the building developers.
If I go ahead and obtain planning permission will a potential purchaser need indemnity insurance regarding the covenant?
Thank you for your comment.
Just because part of the land that a restrictive covenant applies to is sold does not mean that the restriction will not continue to apply to each part of the land. Obtaining planning permission will also not have any real effect on matters. The Local Authority is charged with implementing and ensuring observance of planning regulation. It is not generally interested in legal issues restricting the use of the land.
Insurance might be available for a buyer that wants to build on the land, but it would likely depend on a number of factors. One important aspect of such indemnity insurance is normally the extent to which the beneficiary of the restrictive covenant has been put on notice of any breach or otherwise contacted. Most of the time, an insurer would think twice about issuing a policy when the beneficiary has been contacted or is aware of matters. Even if a policy is issued, a buyer and their mortgage lender (if any) would have to be satisfied with the terms of that policy and the circumstances generally before deciding whether or not to proceed. Of course, a buyer does not “need” insurance per se. They may be prepared to take a risk and proceed without it. On the assumption that the restrictive covenant is noted against the title of the land, then the buyer’s solicitor will almost certainly identify this and advise their client as to its existence.
It should also be noted that a rare exception to the “buyer beware” rule when it comes to property transactions, is that a seller is required to disclose “latent defects in title”. A failure to do this can result in a misrepresentation claim against the seller later, when the issue is discovered (if for some reason it is missed by the buyer when considering whether or not to enter into the contract to purchase the land). The requirement to disclose title defects was explained in the case of SPS Groundworks & Building Ltd v Mahill [2022]. In that case, an overage agreement existed and details of it were included in the auction pack, but the seller did not check this. Despite the auction brochure saying that the seller should read the auction pack, the Court held that this was not sufficient to discharge the seller’s duty to disclose the existence of the title defect. A title defect is broadly anything which has a negative impact on the legal rights of the owner of any property or land that cannot be discovered with reasonable inspection. Whilst this case is arguably restricted to just auction sales, the principles do apply generally, so caution is advisable if there is a defect or encumbrance, especially one that might not be readily identifiable.
Hello, my brother and I recently inherited a property jointly from our mother. Unfortunately the deeds have become lost. We have the previous owners deeds however and there is a successive restrictive covenant on part of the land, limiting building and business use for 80 years. We are 50 years into that timeframe. The current owner is now very elderly and seriously incapacitated and not expected to last very long. Her 3 children have said they would be prepared to sign a ‘deed of release’ for the covenant when their mother dies as they no longer live locally and plan to sell all their mother’s land land soonest, when she passes away. How would I go about accurately drafting/wording such a thing for them to sign and when would I need to get them to sign it? When they are her executors, or as owners? Would I need a legal witness and would this then legally remove the restrictions from our property please? Timing presumably would be crucial also?
Thank you for your comment.
The first thing to check is the extent to which the restrictive covenant is binding. This will depend on the date when it was made and whether or not it can be said that when the property was purchased, it was brought to the attention of the buyer.
On the assumption that it is binding (which it probably is if you are aware of it), an express release from a restrictive covenant is always best. This can only be agreed between the current owners of the dominant and servient land. If the current owner passes away, and it is in the interests of their estate to do so (bearing in mind that the value of the dominant land can be negatively impacted by the agreement to release a restrictive covenant benefitting it – which is often one of the reasons why a financial incentive is often demanded) then it would be something the deceased owner’s personal representatives could agree, subject to having the authority to do so (normally a grant of probate or letters of administration).
Such a release is rarely a complicated document to prepare. It must always be by deed (as property rights need to be dealt with in this way generally) and for a deed to be effective, it must be properly witnessed.
The deed would then be registered at the Land Registry. It also does not “remove” the restrictive covenant. What the Land Registry will do is record the deed on the tittle to the property with a wording along the lines of “by a deed dated xxx made between xxx and xxx, the restrictive covenant referred to at entry xxx was purported to be released”. Once a restrictive covenant is recorded against the title to a property, it stays there for ever, but the deed of release can be relied on as proof that it is no longer enforceable.
Hello, we own some land next to our house, there is a restrictive covenants as follows:
The right to pass and repass with or without vehicles at all times over any such accessway designated from time to time by the Transferor and which falls within the Retained Land as affords access to and egress from the Property to the nearest public highway for the purposes of using the Property as garden land in connection with the Transferees ownership of the adjoining residential dwelling.
With it stating use as garden land, would that mean we could not build a dwelling on the land? Thanks
Thank you for your comment.
We cannot provide specific advice on our website, not least because we would need to consider the title deeds in particular and what has occurred in practice before forming a view of matters.
What we can say is that if a right over property exists and the person that owns that property is proposing to interfere with that right in some way, then this can lead to arguments and problems. In broad terms, if a person benefits from a right of way over land, to effectively take that right of way is not going to be pleased about this and could devalue their own property.
What appears to be your query is whether or not by reason of the fact that the right of way leads to land defined as “garden” whether or not it means that the land can only be used as garden land. As mentioned, we cannot be specific about this, but it strikes us that a description of a piece of land in title deeds might be relevant when it comes to considering some aspects of the use of the land but fundamentally, if there is no restrictive covenant or other right precluding the building on the land in some way, then the fact that it might have historically and to date been a garden is unlikely to mean that it cannot be built upon. As mentioned, we would have to consider the title deeds and history of use before forming a view on this.
Hello, we purchased a freehold house last year and had to agree to a deed of covenant with an estate management company. We pay them regularly for maintaining the general housing estate area but we really see them. Most of the residents feel its a con. Is there any recourse we can take? A fence next to the dual carriageway was has been broken for months now, and I previously had to chase down the removal of a skip from outside my home after they left it there for months. The latter they claimed they denied any knowledge of works on our street despite sending us a headed letter warning of us the works! Considering 60 houses are paying them for this shoddy service seems like a large swindle to me!
Thank you for your comment.
This sounds like an estate rentcharge, which is different to a restrictive covenant. An estate rentcharge is a sum payable to someone for the provision of services. It is more of a positive covenant in that it requires the covenantor to do something (i.e. pay towards the services).
Rentcharges are something that mortgage lenders are not generally happy about and can therefore have an impact on the saleability of a property. This is because if a rentcharge is not paid, the rentowner has statutory certain enforcement procedures which are considered “draconian”. This includes being able to create a leasehold interest over the freehold property. This is a point your conveyancing solicitor should have advised you about but the chances are that this particular rentcharge is “acceptable” because certain variations to the default statutory position have been agreed historically. Therefore, even if you think that the services are not being properly provided, do think twice and get legal advice before even considering withholding payment.
In terms of what can be done if a rent owner (this is the person to whom the rentcharge is paid) is not providing their services, this is not an easy question to answer but in short, there is not much that can be done. This is something the Government recognises and has pledged to help freehold owners with. On November 2023 the Government indicated that it would, when there is sufficient Parliamentary time, look at providing homeowners subject to a rentcharge the ability to challenge the charged or replace the rent owner. More information can be found here: Freehold estates – GOV.UK (www.gov.uk)