Breach of Covenant

Covenants are a frequent source of dispute between homeowners, landlords and tenants, and resolving a disagreement of this nature can cause a huge amount of stress.

At AFG Law, we can work with you to find the best possible outcome and achieve a resolution that is suitable for all parties.

What is a breach of covenant?

A breach of covenant is when one party fails to fulfil the obligations they agreed to in a covenant, such as a written agreement or contract. Breaches can also occur between neighbouring property owners if their property deeds state they owe certain responsibilities towards each other, but they fail to uphold those responsibilities

Covenants are often found in tenancy agreements, property deeds and other documents related to properties and housing. Oftentimes, a breach of covenant will occur when a tenant fails to pay their rent or damages the property.

Are covenants legally enforceable?

Yes, covenants can be legally enforceable and binding so long as they are set-up and created correctly. However, some can cease to be enforceable after a period of time in some circumstances, such as:

Reasonableness
Legitimate interest
Enforcers interest
Covenant type and benefits
Covenant clarity
Covenant registration

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Disputing a restrictive covenant

If you are seeking to dispute a restrictive covenant, there are a few different ways to do so with the assistance of a dispute resolution specialist.

Negotiations: The first step you should take to dispute a restrictive covenant is to try and negotiate with the owner of the covenant. Coming to a mutual agreement is often the quickest, cheapest and least stressful way of releasing a restrictive covenant.

Deed of Express Release: Parties can enter a Deed of Express Release through a mutual agreement on the release of the restrictive covenant. The Deed is then sent to the Land Registry for the restrictive covenant to be removed from the affected property titles.

Upper Tribunal: If an agreement cannot be reached, then the next step would be to apply to the Upper Tribunal. There are specific grounds that can be relied upon for the modification, such as that the restriction is now obsolete or that the covenant impedes reasonable use of the land/property. Some of these grounds are easier to rely on than others.

Civil Procedure Rules (CPR): There is also the option to go to court under Section 8 of CPR for Declaratory Relief; however, most parties do prefer to go to the Upper Tribunal.

Indemnity Insurance: It is possible to obtain Indemnity Insurance to protect yourself from the risk of the owner of the restrictive covenant seeking to enforce it. The cover is usually for an indefinite period at a one-off cost and will cover the successors in title and mortgages of the policy holder.

However, if there is a proposed change of usage or planning application, you may not be able to obtain cover for the new intended use until the consent has been granted and no objections to the restrictive covenant have been raised.

Enforcing a restrictive covenant

If someone has breached your restrictive covenant, you may be able to enforce action provided that you are the owner, or beneficiary, of the covenant.

A common example of a restrictive covenant being enforced is when a tenant breaches the covenant terms. For example, no noise outside of 7am to 10pm or no pets in the flat. If someone has breached one of these covenants, the landlord has a right to enforce a restrictive covenant providing it fits the enforceable circumstances.

There are several ways in which a restrictive covenant can be enforced, including:

An Injunction – The court can issue an injunction to prevent the covenant from being breached.

Damages – The court can award damages instead of an injunction.
Revert Property – The property owner may be required to return the property back to its original state.
Contract Termination – If the covenant breaches the terms of the lease for example, the lease could be terminated.

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Dispute resolution for breach of covenant

Whether you are looking to dispute a breach of covenant, or enforce one, it is important that you’re aware of how time consuming and stressful the process can be. This type of dispute can not only impact your finances, but it can also put a strain on relationships, which can be particularly upsetting for both parties.

This is where dispute resolution can lend a helping hand. At AFG Law, our aim is to resolve breach of covenant disputes quickly and efficiently to achieve the best result for both parties, without the use of court where possible.

We can cut through the legal jargon and provide you with clear and concise guidance and advice thanks to our specialist dispute resolution team.