What Is A Restricted Covenant In Residential Property Law?

An essential role of a Residential Conveyancing Solicitor is to advise clients on the impact of any restricted covenants listed on the title of a property they are considering buying. The last thing you want to discover after purchasing your new property is a restrictive covenant that means you cannot enjoy, change, and/or use your home as you wish.

Although restrictive covenants can be useful in maintaining the aesthetics and value of a property, they can also lead to some rather silly scenarios. For example, at least one Edwardian property in Brighton and Hove includes a restrictive covenant that prohibits owners from displaying their washing in “a lewd and lascivious manner” (referring to underwear). Nowadays, it is unlikely that anyone’s neighbours would consider underwear pegged to a washing line particularly ‘lewd’ or ‘lascivious.’ However, restrictive covenants are still created and rigorously enforced, particularly in relation to new build developments.

What is a restrictive covenant?

Restrictive covenants are legally binding conditions stated on a property’s title or deeds restricting what an owner can do with their property or land. Restrictive covenants may include rules that:

Restrict owners from operating a business on their land.
Restrict owners from making certain alterations.
Determine what can/cannot be parked outside.
Prevent owners from building on the land.
Stipulate how the exterior must look (e.g. external paint and window colour).
Restrict owners from keeping livestock or chickens.

Restrictive covenants are typically put in place by the original owners or developers of land to ensure certain standards are maintained and, hence, protect property values. Crucially, restrictive covenants run with the land, meaning if you are purchasing a new residential property, any restrictive covenants stated on the title will legally bind you.

Are there special conditions required to make a restrictive covenant enforceable?

To be legally enforceable, a restrictive covenant must:

be intended to have been binding by the original parties who created the covenant;
relate to the land in question and significantly affect its use, value, or enjoyment;
run with the land;
be pointed out to subsequent owners;
be reasonable and not go against public policy.

How does the Court enforce restrictive covenants?

The Courts tend to be flexible when ruling on restrictive covenant disputes. This is especially so if the dispute concerns the reasonableness of a covenant that was placed on the land a long time ago. The Court will examine and balance the benefit of the restrictive covenant to the enforcing party and the detriment suffered by the party in breach.

In Johnson, Re [2022] UKUT 294 (LC), the Upper Tribunal (Lands Chamber) ordered restrictive covenants burdening a private dwellinghouse to be modified under section 84(1) of the Law of Property Act 1925, to allow the operation of an Ofsted registered childminding business. The property had two restrictive covenants, one prohibiting the use of the house as a business and the second requiring it to be used only as a private home.

The Upper Tribunal ruled that running a small childminding business was a reasonable use of the property. Because the owner only planned to look after a maximum of six children at a time, the local planning authority concluded that planning consent would not be needed.

If the Court finds a breach of restrictive covenant has occurred, the most common remedies are issuing an injunction to stop the party doing the action that constitutes a breach and/or awarding damages to the enforcing party.

Do new build homes have restrictive covenants?

Yes, in fact it would be rare to find a property in a new build development that did not have several restrictive covenants attached to the title.

Restrictive covenants in new build developments are typically used to keep the aesthetics and uniformity of the development intact. For example, purchasers of new build homes may be prevented from painting the outside of their property a distinct colour from others in the development or changing the style of fencing. How the property is used may also be restricted, for example, you may be prohibited from running a business or converting the property into multi-unit rental accommodation.

Can I have a restricted covenant altered or removed?

In cases where a restrictive covenant is years old and obviously outdated (see the above example of washing being displayed in a lewd and lascivious manner), the following legal remedies can be used:

Applying to the Lands Tribunal – if you believe that the restrictive covenant no longer serves a practical purpose and meets the criteria outlined in section 84 of the Law of Property Act 1925, you have the option to challenge it through the Lands Tribunal. If the Tribunal agrees with your argument, they can modify or remove the covenant.
Negotiating with the beneficiary of the covenant – rather than go through the Tribunal, you can approach the person or entity that benefits from the restrictive covenant and ask them to release or vary it.
Indemnity insurance – if you cannot locate the covenant’s beneficiary, indemnity insurance can protect you and any future buyers against the covenant being enforced.

Wrapping up

Whether you are buying or selling residential property, understanding what (if any) restrictive covenants run with the land is imperative. Onerous or unreasonable covenants can negatively impact an owner’s enjoyment of the land and conversely, make it harder for a seller to find a buyer. Getting expert advice from an experienced Residential Conveyancing Solicitor is vital to ensure the sale and purchase transaction progresses smoothly.To talk to us about buying or selling a residential or commercial property in the UK and the documents you will need to provide, please call 024 7664 1642 or fill in our contact form.