Homebuyer’s Guide to Restrictive Covenantsfjpinvestment
Restrictive covenants are legally enforceable agreements or rules attached to property and land that state what can and cannot be done with it. Restrictive covenants are clauses that can be found listed in title deeds and/or in purchase contracts that prevent (restrict) the owner from doing certain acts or changes.
Restrictive covenants are in place to the benefit of a certain party, and so it may be possible, if you can discover who they are, to have them removed if you can obtain the beneficiary’s consent. Typically, the beneficiary of a restrictive covenant will be someone living in the area. However, restrictive covenants are binding not only on the present buyer but also on future owners too.
Because of the nature of restrictive covenants and the potential limitations they will place on what can be done to land and property, you will want to know about them before you buy, or you could face a nasty surprise down the line. It is your solicitor or conveyancer’s responsibility to ensure you know if any exist and what they mean.
Restrictive covenants can be placed on any type of property, old or new builds, and so it’s worth noting that some property developments can come with restrictive covenants that can prevent homeowners from making desired alterations without paying fees, and potentially large fees at that
Restrictive covenants can be contrasted with positive covenants. The latter can be found on leasehold flats and requires certain conditions to be fulfilled, as opposed to restricting certain activities. Requiring fees for work to be carried out is an example of a positive covenant.
Some examples of restrictive covenants
One of the purposes of restrictive covenants is to help preserve a property’s or area’s local character and consistency. If the buying of land resulted in the building of a twenty-storey block of flats in the middle of a housing estate, for example, this could end up with a lot of upset locals and chaos ensuing on a larger scale. Restrictive covenants are typically imposed by the developer or seller and are listed in the title deeds. They can apply to both the purchase of freehold and leasehold property.
Restrictive covenants can vary to a large degree, but there are some more common ones worth being aware of, such as the following. Limiting the use of land; refraining from altering the property in a substantial way; and refraining from using the property for commercial purposes. Here are some more specific examples to be aware of:
- No parking of caravans, boats, or commercial vehicles on the property.
- The use of the property and land is not to be used for commercial or trade purposes.
- Farm animals are not permitted on the property, and pets are limited to a certain number.
- Avoid causing annoyance to your neighbours. This can include loud noises or unpleasant smells emanating from the property or land.
- No building or further construction work is permitted. Only extensions of a certain size are permitted. Alternatively, extensions or major alterations cannot be built without permission.
- Fences, walls, and barriers must not be built above a specified height.
- Do not install satellite dishes.
- Do not install intrusive security lighting.
- Do not play loud music after a certain time of day.
Enforcing restrictive covenants
The beneficiary of the covenant – typically the owner of the affected land – is usually the one who is able to enforce the restrictive covenant. Landowners can and do impose restrictions on what can and cannot be done to the land they are selling in order to preserve a desired character and reduce the possibility of damage.
“As I am sure we can all appreciate,” said Jamie Johnson, CEO of FJP Investment, “restrictive covenants are desirable in that they help uphold standards for all those affected by the land and property being sold. After all, who would relish the idea of a disrespectful or uncooperative owner of land being able to do whatever they wanted with it, and perhaps even use their land to purposely cause mischief.”
Restrictive covenants on new and old properties
Restrictive covenants can be found on old and new builds alike. Of course, the type and scope of restrictions placed on new builds will likely be more in tune with modern concerns, like satellite dishes and boats, etc., but even restrictive covenants placed on old buildings and land can be enforceable many years after being imposed on the original sale, no matter how many times the land has changed hands.
Having said this, for covenants that have been imposed by someone that is no longer around, it may be harder to enforce them since the intended beneficiary is no longer available to be consulted. Furthermore, vague or ambiguous wording may also weaken the enforceability of restrictive covenants, perhaps done intentionally as a “catch-all” covenant. The same applies to outdated wording or meaning.
Breach of restrictive covenants
Breach of restrictive covenants can result in a penalty of some kind, even if the breach was done unwittingly. A penalty fee or compulsion to do remedial work could be imposed against someone for breaching the restriction, or legal action could follow. For a leasehold breach, for example, this could be deemed serious enough to result in the lease being terminated by the landlord.
In the event that a breach of a restrictive covenant has occurred, those with legal standing to enforce the restrictive covenant must first contact the offending party and ask them to put things right again, except in circumstances where the breach results in financial loss or significant disturbance, in which case compensation can be sought.
When it comes to restrictive convents, be sure to find out if any are attached to the property and land you are interested in, and what exactly they entail.