Restrictive covenants: what do they mean?

A restrictive covenant is a rule written into the deeds of your home.

These rules are legally binding and might prevent you from making certain changes to the home or undertaking further building on the land.

Restrictive covenants can cover a range of areas, but examples might be:

1. A covenant restricting alterations or extensions

2. A covenant restricting building on a portion of the land

3. A covenant preventing the home or land being used for a business

4. A covenant preventing the installation of satellites

5. A covenant designed to ensure outside space is well maintained.

Often restrictive covenants are used to prevent development work to homes that might have a negative impact on neighbours and other residents.

Such covenants might have the objective of ensuring “uniformity” of appearance or maintaining standards in shared areas or front gardens.

Restrictive covenants can be used on both freehold and leasehold homes.

Some restrictive covenants on much older homes relate to rules and ideas that might not be relevant today.

The person who is the landowner or who otherwise benefits from the restrictive covenant can go to court to enforce a restrictive covenant if it has been breached.

Covenants that are very old can be unenforceable, especially if the beneficiary cannot be traced.

The beneficiary can take action via the courts. This will usually be resolved via a lower tier tribunal case.

The cost of hiring a solicitor and enforcing a restrictive covenant can be expensive. It is likely to be more expensive, however, for anyone who breaches a covenant (see below).

The biggest risk in terms of breaching restrictive covenant comes from undertaking building work.

If there are restrictions in your deeds which you ignore or don’t understand and building work goes ahead, you could have to go expensive lengths to roll back on this breach.

This might mean taking down an extension or development and covering your own legal costs through tribunals – it can get very costly indeed.

If a covenant has been breached and there have been no challenges to what has been done for more than 12 months, you may be able to get insurance to protect the work.

Protective covenant insurance protects against financial losses in the event that a breach of restrictive covenant is enforced or attempted to be enforced.

Yes. It’s possible to apply through the courts to remove restrictive covenants from your deeds.

The cost of lodging a request to remove or modify such restrictions through the courts is around £900.

It will then cost you a further £1,100 if the case is heard at tribunal and a decision is made at a hearing. If there are no objections and it is approved without a hearing, it will cost you under £300 instead.

If there is a hearing, you might only be able to remove or amend the covenant by paying a sum of money to the beneficiary of the covenant. This compensation varies.

On a freehold home a covenant will last as long as there is a freehold or until it is removed during a tribunal process.

For leasehold homes, the covenants last as long as the lease. During a process of lease renewal, it’s a good idea to ask your solicitor to look at any restrictive covenants in your lease.

Restrictive covenants can be used on the deeds of new-builds, but they can also be in place on period homes, too.

Some older covenants are unenforceable if the original landowner is long dead or the wording is old fashioned and needs updating.

Restrictive covenants on new-builds might be in place to ensure home developments don't impact on neighbours. Or to foster visual uniformity in an area.

Restrictive covenants “run with the land” which means whoever owns the home inherits the rule and the restrictions.

Sometimes issues over restrictive covenants come up during a sales process.

Usually, your conveyancer will flag that there are restrictive covenants in the deeds well before contracts are exchanged.

In some cases, such as restrictions on building on the land, restrictive covenants might impact the future value of a property.

It can be an opportunity to ask questions of the sellers about if they’ve tried to challenge the covenants in the past.

Sometimes your solicitor will make recommendations over the sale.

There may also be an option to take out insurance against the possibility that the beneficiary of a covenant that seems unenforceable turns up.

Remember, once the deeds are signed, you are legally accountable for any breaches to restrictive covenants.

If any restrictive covenants aren't highlighted by your legal team during the purchase process you're within your rights to complain.

The Legal Ombudsman can award up to £50,000 in compensation in cases such as these.

But it is possible, especially if you've had to take down building work, that a breach could cost you a lot more than £50K.