Restrictive Covenants
How to deal with restrictive covenants affecting your property
What is a restrictive covenant?
A restrictive covenant is essentially a promise not to do a certain thing with specific land or property. Common examples include promises not to allow hedges to grow to a certain height, not to run a business from the property and not to build a certain type of property on the land.
Restrictive covenants can affect owners and purchasers of land in a variety of ways. If you are looking to purchase a property, you should note any restrictive covenants on the title and obtain legal advice regarding the impact that these covenants may have on your ownership and use of the property.
Options for dealing with the release of a restrictive covenant
There are various ways to deal with the release of a restrictive covenant if you are the owner of the land which is burdened by the restrictive covenant, and you anticipate that your use of the land/property may breach the covenant.
Indemnity insurance
Indemnity insurance is an option to protect against the risk of a beneficiary of the restrictive covenant seeking to enforce it. Usually, insurance cover is for an indefinite period and will be paid by a one-off premium. If indemnity insurance is in place and the restrictive covenant is enforced, the insurance company will, where required, pay the insured’s legal costs incurred in defending the action and pay damages to the person with the benefit of the restrictive covenant. Insurance can be useful where the beneficiary of the covenant is unknown, and a quick, long-term solution is required.
Express release
It may be possible to negotiate the release or variation of a restrictive covenant. Payment may be required by the beneficiaries of the restrictive covenant and any agreement reached should be properly documented in a deed of release/variation. It is important to note that, if indemnity insurance is a possible option, this should be explored before approaching any beneficiaries as this can prevent an insurance company from offering cover.
Upper Tribunal (Lands Chamber)
If the beneficiary of the covenant cannot be reached and insurance is not an option, an application can be made to the Upper Tribunal (Lands Chamber) for the modification or discharge of the covenant. The Tribunal must be satisfied that either the covenant is obsolete, it impedes reasonable use of the land, there has been an agreement reached between the parties, or that no injury will be caused to the beneficiaries by the proposed discharge or modification.
Contact us
If you have any queries about restrictive covenants, property litigation specialists at BRM Solicitors can help you.
