Finding your ideal home is exciting but discovering that it is subject to a restrictive covenant can cause concern. Buyers often wonder whether a restrictive covenant is something to worry about or whether it should put them off purchasing the property altogether.
The good news is that many homes in England and Wales are affected by restrictive covenants, and in many cases they have little or no impact on day-to-day living. However, some can significantly affect how you use the property, particularly if you have future development plans.
At AFG Law, our Residential Property solicitors regularly advise clients who are buying a property with restrictive covenants. Understanding what they are and how they could affect your plans is an important part of the conveyancing process.
What is a Restrictive Covenant?
A restrictive covenant is a legal obligation that limits how a property owner can use their land. Unlike planning permission or building regulations, a restrictive covenant is a private legal agreement that usually benefits another property owner or landowner.
Restrictive covenants are often recorded within the property’s property deeds or registered title and continue to bind future owners when the property is sold. This means that when you purchase a property, you usually take it subject to any existing restrictive covenants.
What do Restrictive Covenants Include?
There are many different types of restrictive covenant, and each property is unique. Common restrictive covenants include restrictions on:
- Building extensions without consent.
- Constructing additional buildings.
- Running a business from the property.
- Keeping certain animals.
- Parking commercial vehicles.
- Parking a particular type of vehicle, such as caravans, motorhomes or large vans.
- Altering the external appearance of the property.
- Dividing the property into separate dwellings.
Some covenants date back many decades and may appear outdated, while others continue to have significant practical importance.
Should a Restrictive Covenant Put You Off Buying?
Not necessarily. Many buyers are surprised to discover that restrictive covenants are extremely common, particularly on modern housing developments and older estates.
The key question isn’t whether a property has a restrictive covenant; it is whether the covenant is likely to affect your intended use of the property.
For example, if you simply intend to live in the property without making significant changes, the covenant may never cause an issue.
However, if your plans for the property include building an extension, converting a garage or operating a business from home, the covenant could become much more important.
Why Your Conveyancing Solicitor Will Check for Restrictive Covenants
One of the key aspects of due diligence during the conveyancing process is investigating whether the property is affected by restrictive covenants.
Your solicitor will review the title documents and property deeds to identify any restrictions and explain what they mean in practice.
Rather than simply telling you a covenant exists, an experienced conveyancing solicitor will explain:
- What the covenant prevents.
- How it could affect your future plans.
- Whether any additional enquiries should be raised.
Understanding these issues before exchange of contracts allows you to make an informed decision.
Can Restrictive Covenants be Enforced?
Potentially, yes. If a restrictive covenant remains enforceable and you breach it, the person or organisation with the benefit of the covenant may be able to take legal action.
Depending on the circumstances, they could seek:
- An injunction requiring you to stop the works.
- An order requiring alterations to be reversed.
- Financial compensation.
Whether enforcement is possible depends on several legal factors, including who benefits from the covenant and whether it continues to have legal effect.
Can a Restrictive Covenant be Removed?
Sometimes. If a covenant is causing difficulties, there may be options available. One possibility is obtaining the agreement of the person who has the benefit of the covenant.
In other cases, it may be possible to apply for covenant removal or modification through the Lands Chamber of the Chamber of the Upper Tribunal.
However, these applications are not automatic and can involve detailed legal arguments. The Tribunal will consider various factors before deciding whether the covenant should be modified or discharged. Seeking legal advice before purchasing the property is often preferable to trying to resolve the issue later.
What If Previous Owners Ignored the Covenant?
Occasionally, buyers discover that previous owners have already carried out works which may have breached a restrictive covenant. This doesn’t necessarily mean the issue has disappeared.
Your solicitor will investigate the position and advise whether further enquiries, indemnity insurance or other steps are appropriate before proceeding. Ignoring a potential issue simply because previous owners did so could create problems when you later come to sell the property.
Could It Affect Selling the Property?
Potentially. When selling the property, you will usually be asked whether you’re aware of any breaches of restrictive covenants.
Buyers and their solicitors will carry out their own investigations, and any unresolved issues could delay the transaction or lead to additional enquiries.
Addressing concerns before they become a problem can often make future sales much smoother.
What Are the Potential Impacts of a Restrictive Covenant?
The potential impacts of a restrictive covenant will vary depending on its wording and your intended use of the property. Some buyers may never notice any practical effect.
Others may find that a covenant limits future development or affects the value or marketability of the property. For this reason, restrictive covenants should never be dismissed without proper consideration.
An issue that seems insignificant today could become much more important if your circumstances change in the future.
Is It Still Worth Buying a Property with a Restrictive Covenant?
In many cases, yes. A house with restrictive covenants is not necessarily a bad purchase. The vast majority of residential properties are bought and sold every year without restrictive covenants causing any difficulties.
The important thing is understanding exactly what restrictions exist before committing to the purchase. If your intended use of the property is unlikely to conflict with the covenant, there may be little cause for concern.
However, if your long-term plans include significant alterations or redevelopment, obtaining legal advice before proceeding is highly recommended.
How AFG Law Can Help
At AFG Law, our Residential Property solicitors carry out thorough due diligence on every transaction to ensure clients understand exactly what they are buying.
If you’re considering purchasing a house with restrictive covenants, we can:
- Review the property deeds and title documents.
- Explain the meaning of any restrictive covenant.
- Advise on the potential impacts for your proposed use of the property.
- Raise additional enquiries where appropriate.
- Advise on covenant removal or modification where necessary.
- Help you make an informed decision before you purchase a property.
Buying a home is one of the biggest financial decisions you’ll ever make. Understanding any legal restrictions before you commit can help you avoid unexpected problems in the future.
If you’re buying residential property and would like advice on restrictive covenants or any other aspect of the conveyancing process, contact AFG Law. Our experienced Residential Property team is here to guide you through every stage of your purchase.