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“As they rarely impact daily life, it’s easy to overlook restrictive covenants. But as a property owner, you do so at your peril. Breaches can prove expensive, sometimes highly so.Contents
- What is a restrictive covenant?
- Common restrictive covenants
- Are restrictive covenants enforceable?
- Restrictive covenants against development
- What should you do if you have breached a restrictive covenant?
What is a restrictive covenant?
Whether your home is freehold or leasehold, it’s almost inevitably subject to one or more restrictive covenants. However, as most covenants affect us infrequently, it’s easy to forget their existence.
In short, a restrictive covenant is a private agreement between land owners in which one party agrees to restrict the use of their land in some way to benefit the other party’s land. Once incorporated into the property’s title deeds, restrictive covenants bind the land, not the landowner. As the agreement ‘runs with the land’, it continues even after the original parties have sold and moved on.
Common restrictive covenants
The passage of time may lead to an assumption – which could well be wrong – that a restrictive covenant is of its time and now obsolete. For example, here are some historic restrictive covenants that sometimes affect older residential property:
- No airing of undergarments in a communal garden.
- Not acting in a lewd and lascivious manner.
- Not to run a slaughterhouse, tallow chandler, or soap-boiler.
- A ban on keeping pigs, poultry or pigeons.
- A prohibition on playing the violin and trumpet.
However, restrictive covenants that are more problematic for homeowners are the ones restricting ways you would like to use the property. Or those preventing you from altering the property itself.
Such restrictive covenants are surprisingly common, and particularly so on newer properties. Common ones include prohibitions on:
- altering or modifying the property.
- parking caravans or commercial vehicles on the property.
- erecting a satellite dish or radio antennae.
- causing a nuisance or annoyance to neighbouring properties.
- operating a trade or business from the property.
Are restrictive covenants enforceable?
Restrictive covenants are potentially enforceable, but their enforceability depends on a variety of factors, including:
- Is the covenant negative? In other words, does it say the landowner must not do something? Significantly, positive covenants, ie you must do something, do not run with the land.
- Did the covenant protect land retained by the person originally benefitting from it?
- Was the intention that the burden should ‘run with the land‘?
- Does the covenant genuinely benefit land owned by the person seeking to enforce it?
- Is the covenant correctly drafted or constructed? In other words, is it ambiguous? Is there certainty over which land the covenant affects? For example, does the covenant cover land and buildings? And is it possible to determine precisely which land is subject to the restrictive covenant?
- Were future events anticipated?
- Is the covenant correctly registered?
Any or all of these factors can affect the enforceability of a restrictive covenant.
Restrictive covenants against development
Whether it’s a neighbour’s proposed extension or a larger-scale development, restrictive covenants can be an effective shield against building and development. And there is some notable case law.
For example, the case of Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd, went all the way to the UK Supreme Court in 2020.
The case relates to a restrictive covenant preventing the development of land adjoining a children’s hospice run by a registered charity. After buying the adjoining land, the developer built thirteen affordable housing units in breach of the restrictive covenant. After that, the charity sought to impose the covenant:
“so that terminally ill children in a hospice built on the Trust’s adjoining land could enjoy, in privacy, the use of the grounds.”
The developer was fully aware of the existence of the restrictive covenant. And Section 84 of the Law of Property Act 1925 would have allowed them to apply to the Upper Tribunal (Lands Chamber) to “discharge or modify” the covenant as being “contrary to public interest“.
Nevertheless, they chose instead to apply for planning permission and commence building before applying to modify the covenant. And notably, the Supreme Court described this conduct as a “cynical breach” that fundamentally altered the position concerning the public interest ground. Moreover, they said allowing the developer to modify the covenant in reliance on a state of affairs created by their deliberate breach would be wrong. Accordingly, the court dismissed their appeal.
What should you do if you have breached a restrictive covenant?
Typically, disputes arise as a result of:
- failing to check whether a restrictive covenant is in place; or
- knowingly breaching a restrictive covenant on the assumption that it’s unenforceable; or
- knowingly breaching a restrictive covenant and hoping that the person with the benefit of the covenant will not seek enforcement.
But whatever the reason for breaching a restrictive covenant, it can prove expensive. Potentially, you may face an injunction, damages, legal costs, and the cost of rectifying your breach. Therefore, you should never assume that a restrictive covenant is unenforceable. Or that the person with the benefit will turn a blind eye. Always take legal advice first.
