A restrictive covenant is a binding condition which seeks to restrict the activities and / or development permitted at a particular property or building. They can be far reaching, for example, to prohibit any development; to prohibit any use apart from residential; to forbid alterations without consent.
The land subject to the restrictive covenant is known as the ‘burdened land’. The land that enjoys the benefit of the restrictive covenant is known as the ‘benefitting land’.
How will I know if my land is subject to a restrictive covenant?
Much of the land in England is now registered. In the case of registered land, the restrictive covenant will be noted on, and apparent from, the title register for that property. In the case of unregistered land, the restrictive covenant requires registration as a land charge at the Land Charges Department.
The original owners of the burdened and benefitting land have changed. Are the restrictive covenants still enforceable?
Generally, yes. Each case will turn on its facts and enforceability will depend upon whether the covenant has been registered against the title / as a land charge; that it was created for the benefit of the land as opposed to the original benefitting owner; and so long as the restrictive covenant has not been previously agreed to be modified, or it has been extinguished.
I am the owner of land burdened by a restrictive covenant. I wish to use the land or build extensions contrary to the terms of the covenant. What can I do?
The current owners of the burdened and benefitting land can enter into an agreement which modifies or discharges the terms of the original restrictive covenant. Where parties cannot agree to modify or discharge the provisions, the owner of the burdened land can apply to the Lands Chamber, Upper Tribunal under Section 84 of the Law of Property Act 1925. The application can be for:
- Modification;
- Discharge; or
- Modification or discharge in the alternative.
What grounds can be relied upon for modification?
(a) – by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Upper Tribunal may deem material, the restriction ought to be deemed obsolete, or
(aa) – the continued existence would impede some reasonable user of the land for public or private purposes, or would unless modified so impede such user; it confers no practical benefit of substantial value to those entitled to enforce it; and the loss of the covenant can be compensated in money, or
(b) – the person entitled to the benefit has agreed expressly or by implication to discharge or modify the restrictive covenant, and / or
(c) – the proposed discharge or modification will not injure the persons entitled to the benefit
If I make out the ground, will the covenant certainly be modified or discharged?
Not necessarily. The Lands Chamber has a wide discretion to decide whether to allow modification or discharge. Factors such as the age of the restrictive covenant and the conduct of the applicant are factors which may be considered.
What may happen if I proceed with works in the face of a restrictive covenant which otherwise prohibits me from carrying out the works?
The person with the benefit of the restrictive covenant might apply to the Court for an injunction to stop further works taking place. They may also claim compensation in the form of damages for the breach of covenant.
Some landowners whose property is burdened with restrictive covenants will take out a title indemnity policy, which insures them for specified pre-agreed works that would otherwise be caught. The indemnity insurance would then respond to a claim by the benefiting landowner. However, careful consideration of the terms of the indemnity policy should be given. Litigation over breach of restrictive covenants can become protracted and expensive.
What should I do if I want to make alterations or carry out works which would be caught?
I would recommend seeking legal advice as to whether the restrictive covenant is enforceable. There are many ways in which a restrictive covenant can be found and treated to be unenforceable. With the benefit of that legal advice, you and your legal advisor can decide upon an appropriate strategy. If the restrictive covenant is no longer enforceable, the land otherwise burdened will no longer be burdened, and to the conditions will not apply.
Each case will be fact specific as to the best approach. Some owners of burdened land will approach the benefitting landowner and look to reach an agreement. However, such an approach would highly likely preclude title indemnity insurance being available. In other cases, an application to the Lands Chamber would be the sensible next step. If you should require legal advice in relation to the enforceability of a restrictive covenant, please contact me, Helen Williams, on 01392 401176 or H.Williams@stephens-scown.co.uk