When buying or selling a property, you may be advised that the property is subject to certain covenants that could affect how you can use or enjoy the property. Restrictive covenants are promises made by a purchaser, and all subsequent purchasers by default, to do or not do something, in relation to the property or land. They are usually included in the Transfer Deed or Conveyance documents that transfers the land or property to the purchaser, signed by both parties. They can be enforceable for a specified period or forever.

Covenants can either be positive, or negative. Positive covenants require you actively to undertake a task, whilst negative covenants restrict you from doing something at the property or on the land.

Covenants are created for various reasons, every seller will have different requirements to fulfill and/or wishes for the land they are selling, which will affect the covenants they put on the title to the property, if any. Some sellers create covenants to comply with the conditions of the planning permissions and local authority requirements affecting the property. Other sellers create covenants for the uniformity and appearance of the property/development in mind. Some covenants are created to prevent neighbour disputes and make the area a pleasant place to live. Some covenants restrict the type of vehicle that can be kept at the property, what the property can be used for, or even how many (and what type) of pets can be kept at the property.

One of the most common restrictive covenants is not to do or keep anything on the property that could be a nuisance to the neighbouring properties. This is general covenant that could cover a wide variety of actions, to try to keep the area a pleasant place to live. However, some sellers will specifically prohibit certain things or uses of the property. For example, there could be a limit on the amount or species of animals you can keep at the property, not to use the property for business or for anything other than as a residential home. Some covenants, such as a prohibition against keeping a caravan on the driveway, more than 1 cycle shed or regarding the maintenance of the boundaries, help to keep the area tidy and attractive and preserve the value of nearby properties.

If the seller has breached any of the covenants there are a few options. An indemnity insurance policy can usually be taken out if there have not been any complaints made or permission given and there has not been any contact with the party who has the benefit of the breached covenant. These policies could compensate you for any financial loss caused if the beneficiary enforces the covenant. Alternatively, we can approach the beneficiary and request that the covenant is removed from the title. If all parties agree, then a Deed of Release can be entered into. Lastly, you can apply for retrospective or future consent from the beneficiary, but it is not always guaranteed they will grant such consent. However, sometimes it is not always clear who has the right to enforce the covenants, so finding this party could be difficult and prevent the above-mentioned avenues, leaving the indemnity policy as the only option.

If you breach a restrictive covenant the seller or their successor could enforce the covenant on you. This could mean you must undo all works completed at your own cost, even if this something very significant and costly, such as an extension.

In conclusion, it is very important your solicitor is aware of the intended use of the property/land you are buying, so they can highlight any covenants that could interfere with your enjoyment of it. As well as this, your solicitor will investigate any suspected or known breaches by the sellers, so it can be dealt with before completion. It is important that you are aware of the covenants affecting the property you propose to buy. MCP will report to you on the covenants affecting the property, and you must bring any potential breaches you notice from your visit to the property to your solicitor’s attention.

If you have any queries regarding covenants, or another property matter, give the Property Department at MCP a call to see if we can assist.