What are restrictive covenants on land?

Restrictive covenants on land are legal agreements that impose certain limitations or obligations on how the land can be used or developed. These covenants are typically written into the title deeds of the property and are enforceable by law. The purpose of restrictive covenants is to protect the interests of the original landowner/housing developer and to maintain certain standards or conditions within a particular area.

Generally, restrictive covenants affect the land owner negatively by telling them what they can and can’t do with their property. A positive covenant is the opposite, as it outlines actions the land owner must take in regard to the property/land. Details on properties, such as if any covenants are present, can be found on the charges register. A specialist commercial solicitor can assist with land charges and restrictive covenants, ensuring clients are fully aware and informed of restrictions prior to making any purchase. 

Common examples of restrictive covenants include limitations on:

• Land use: These covenants may specify the type of activities that can be carried out on the land, such as prohibiting commercial activities or restricting the land to residential use only.
• Building and development: Restrictive covenants may regulate the construction of buildings on the land, such as specifying minimum or maximum building sizes for planning permission, architectural styles, or materials that must be used.
• Alterations and modifications: Some covenants may restrict alterations or modifications to existing structures on the land, such as something as simple as installing a satellite dish, or to prohibiting extensions or additions that would significantly alter the appearance or character of the property. 
• Landscaping and maintenance: Covenants may require the landowner to maintain certain landscaping features or to refrain from making changes that would negatively impact the appearance of the property or surrounding area.
• Nuisance: Covenants may include provisions aimed at preventing activities that could create a nuisance or disturbance to neighbouring properties, such as noise restrictions or limitations on keeping certain animals.
• Subdivision and resale: Some covenants may restrict the subdivision of the land or impose conditions on the resale of the property, such as requiring the approval of the original developer or landowner before selling.

Enforcement of restrictive covenants typically runs with the land and falls to future owners, as well as any homeowners’ associations or other governing bodies established to manage the development or community where the land is located. Breach of a restrictive covenant can result in legal action, including injunctions to prevent further violation and damages for any harm caused by the breach.

Many people who buy a property or land with restrictive covenants may choose to take out indemnity insurance, a type of insurance policy that provides protection to property owners against potential losses or liabilities arising from breaches of restrictive covenants.

Are restrictive covenants on land enforceable?

Restrictive covenants that run on land are generally enforceable, provided they meet specific legal requirements. 

First and foremost, the covenant itself needs to be legally sound. It must be clear and unambiguous in its restrictions, avoiding overly broad or unreasonable limitations. Covenants that go against the public interest, like preventing all construction on a plot, wouldn’t be enforceable.

The covenant must be in writing and demonstrably benefit a particular piece of land, often called the “dominant tenement.” This benefit can’t be for a general advantage but needs to be tied to a specific property.  

For covenants created after 1925, the Law of Property Act 1925 established a process called “annexation” to ensure the benefit automatically runs with the neighbouring land. In simpler terms, the right to enforce the restriction goes along with ownership of the benefitted property. The person seeking to enforce the covenant needs to have a legal stake in the land that benefits from the restriction. This could be the owner themselves or someone with a recognized interest in the property deeds, such as a homeowners’ association.

Even if all the above conditions are met, enforceability isn’t guaranteed. Courts have the power to consider additional factors, such as:

• Time and Change: Has a significant amount of time passed since the covenant’s creation? Has the surrounding area changed dramatically, rendering the restriction outdated or impractical? For instance, a covenant limiting building height in a once-rural area might be less relevant if the area has become densely populated.
• Monetary Solution: Could financial compensation be an alternative to enforcing the covenant? If the inconvenience caused by the restriction can be addressed with money, the court might consider it a more reasonable approach.

What happens if someone breaches a restrictive covenant?

The party benefiting from the restrictive covenant may initiate legal proceedings against the party in breach. This could involve seeking injunctions to prevent further violation of the covenant or pursuing damages for any harm caused by the breach. 

An injunction is a court order forcing you to stop the breach and potentially return the property to its original state. For example, if you built a shed exceeding the height limit, an injunction might require you to dismantle it. The covenantee could also seek compensation for any financial loss they suffer due to your breach.

It’s often advisable to try and resolve the situation before legal action is taken. Open communication with the covenantee and seeking negotiation and mediation could lead to a less confrontational solution. This could involve agreeing on changes to the covenant, obtaining consent for the breach retroactively, or reaching a settlement to address the consequences of the breach.

Removing restrictive covenants on land

Removing restrictive covenants on land can be a complex process and may require the agreement of various parties involved. Some potential methods for removing restrictive covenants include:

1. Negotiation: The simplest way to remove a restrictive covenant is often through negotiation with the party benefiting from the covenant. If all parties agree, the covenant can be formally released or modified. This typically involves executing a deed of release of the covenant or variation, which should be properly drafted and executed to ensure its validity.
2. Deed of Release or Variation: If all parties are willing to remove or modify the covenant, they can execute a deed of release or variation. This document formally releases the burden of the covenant from the land, either completely removing it or altering its terms. The deed should be properly drafted and executed in accordance with legal requirements.
3. Application to the Upper Tribunal (Lands Chamber): In some cases, if it can be demonstrated that the restrictive covenant is obsolete, impedes reasonable use of the land, or is contrary to the public interest, an application can be made to the Upper Tribunal (Lands Chamber) to discharge or modify the covenant under section 84 of the Law of Property Act 1925. This process can be complex and may involve a hearing before the Tribunal.
4. Court Proceedings: If negotiations fail and there is disagreement among the parties regarding the covenant’s validity or enforceability, it may be necessary to seek a resolution through court proceedings. This could involve applying to the court for a declaration that the covenant is unenforceable or seeking an injunction to prevent its enforcement.
5. Statutory Declaration: In some cases, if the beneficiary of the covenant cannot be located or identified, it may be possible to remove the covenant through a statutory declaration process. This typically involves making a statutory declaration stating that the covenant is obsolete or unenforceable, which can then be registered with the Land Registry.

It’s important to note that removing restrictive covenants can be a complex legal process, and it’s advisable to seek professional legal advice before proceeding.

How can ARC Costs assist?

ARC Costs has a network of solicitors who can provide practical advice and assistance on removing or enforcing restrictive covenants on land.

In addition to introducing you to a solicitor, we can also assist in the recovery and negotiation of legal costs in land dispute cases, whether you are the paying or receiving party.

ARC Costs are highly experienced in advising and assisting with costs issues and disputes in different areas of law. As Costs Draftsman and Costs Lawyers, we can assist in your Commercial Litigation Costs issues.

If a costs award has been made, allowing you to recover costs from your opponent, we can assist with preparing a Bill of Costs on your behalf to ensure maximum recoverability. We can also assist in Costs Negotiations and represent you at detailed assessment proceedings which can determine the amount of costs you may be able to recover.

If you have been ordered to pay costs to your opponent, we can assist in disputing costs which may be sought and which you may deem to be excessive and unreasonable. We can do this by way of preparation of  Points of Dispute and also through negotiations to ensure you will only pay for costs which are reasonably incurred and not exaggerated.

Should you wish to discuss your costs query with us, please contact us on 01204 397302 or via email at info@arccosts.co.uk. Alternatively, you can complete our online query form and we will contact you to discuss your query further. We can provide expert legal advice on costs in our free, no obligation initial consultation.

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