A property covenant is a legal promise recorded in a title deed. It sets out something you must do (a positive covenant) or something you’re not allowed to do (a restrictive covenant).
Restrictive covenants generally “run with the land,” meaning they bind not just the person who first agreed to them, but every future owner also. This guide explains what property covenants are, the different types, and why they matter.
What are the Different Types of Covenants?
There are two types of covenants in property law that you need to understand. These are positive covenants and restrictive covenants.
Positive covenants
These require you to actively do something, such as maintain a shared driveway, a fence or a wall, or keep a building in good condition. Unlike restrictive covenants, positive covenants don’t automatically pass to future owners of freehold land, though they can still be enforced in certain circumstances.
Restrictive covenants
A restrictive covenant prohibits the landowner from doing something with the property, for example, running a business from home or keeping certain animals. Restrictive covenants generally run with the land, so they stay binding on whoever owns the property, even years after they were first agreed.
Why Covenants Matter
Covenants help:
- Preserve Property Value: They maintain the appearance and value of properties and neighbourhoods.
- Regulate Use: They ensure property use aligns with community standards or development plans.
- Resolve Disputes: They provide a framework for dealing with conflicts over property use or maintenance.
How Do Covenants Affect Buying or Selling a Property?
Regardless of whether you’re buying a house or selling your property, it’s crucial to:
- Review Documents: Examine the title deed for any covenants to avoid unexpected restrictions.
- Consider Value: Understand how covenants might impact property use and value.
- Know Your Obligations: Be aware of any legal responsibilities to prevent potential disputes.
Examples of Property Covenants
- Residential Areas: Requirements for maintaining property exteriors.
- Historical Properties: Restrictions on renovations to preserve the property’s historical features.
- Commercial Properties: Limits on business types to fit with the local area.
Can a Restrictive Covenant Be Removed or Changed?
A restrictive covenant can be removed or changed, but it can require a formal agreement. This agreement needs to be discharged or modified by a person or organisation.
If an agreement isn’t possible, you can apply to discharge or modify the covenant under Section 84 of the Law of Property Act 1925, via the Upper Tribunal (Lands Chamber). Indemnity insurance is another option, often easier and cheaper than applying to remove the covenant altogether, particularly where the risk of enforcement is low.
What Happens If a Covenant Is Breached?
Breaking a covenant can lead to legal disputes, injunctions, or a claim for damages, depending on how the person who benefits from the covenant chooses to enforce it. Breaching a covenant, even unknowingly, can also affect your ability to sell or remortgage the property later, as buyers’ solicitors and mortgage lenders will flag it during their checks.
Getting Help with Property Covenants
If you’re dealing with property covenants, speaking to a legal expert can provide clarity and protect your interests. Bespoke Law Services offers tailored advice on dealing with these agreements. For personalised assistance with covenants and property law, contact us.
We’re here to help you handle the complexities with confidence.
FAQs About Property Covenants
What are covenants?
Covenants are legal promises recorded in a property’s title deeds, requiring you to either do something (positive covenants) or refrain from doing something (restrictive covenants).How long does a covenant on a property last?
Property covenants can last indefinitely if there isn’t an expiry date in the deeds.
Can a restrictive covenant be removed?
Yes, in some cases. It can be discharged by agreement, through the Upper Tribunal, or covered with indemnity insurance.
What happens if I breach a covenant on my property?
The party who benefits from the covenant can seek an injunction or claim damages, which can affect your ability to sell or remortgage.
Do covenants expire over time?
No, covenants in property law do not automatically expire over time. They “run with the land”, meaning they will be bound to future owners.
Will a mortgage lender still lend on a property with a restrictive covenant?
Yes, provided the restrictive covenant does not harm the property’s market value or resale potential.
