Restrictive covenants: their impact on land and property owners

Covenants over land with development potential can significantly affect its value or limit its use in ways that conflict with the owner’s commercial objectives.

HCR’s Real Estate Disputes team has extensive experience in dealing with restrictive covenant cases. Partner Natalie Minott, a partner based in our Cambridge office, represented two of the successful objectors in the reported case of Barry Christopher Keech and Deborah Sharon Keech v Geoffrey Coleridge, Pauline Coleridge, Richard Swainson and Jacqueline Swainson. This case related to residential land and a potential infringement on the applicants’ enjoyment of their home.

Here are some reminders about how covenants can bind land, along with some practical tips for property owners affected by them.

What are restrictive covenants?

Restrictive covenants are conditions placed on land that limit how it can be used. They are typically created by an original seller or developer, but can also arise by agreement.

They are usually documented in the property deeds or appear on the Land Registry title. They often bind future owners – not just the original parties. It can sometimes be tricky to identify all the land that benefits from the covenant, which can complicate negotiations for release and risks a party being held to ransom.

Covenants can have wide-reaching implications and tensions can arise when the original purpose of a covenant has eroded over time: for example, a covenant preventing building works above a certain height to protect a beautiful view may become irrelevant if the landscape changes. Similarly, a covenant limiting a building’s use may no longer make sense if language and usage have changed significantly since it was drafted.

How can restrictive covenants affect property and landowners?

• They can prohibit a landowner making physical changes to a property, such as altering a building’s appearance or adding structures.
• Many restrictive covenants ‘run with the land’, which can affect saleability, so buyers must consider how their intended future use might be restricted. Terms like ‘industrial use’, ‘residential purposes’ or ‘not for business purposes’ must be examined in the specific context of the covenant at the time and the mischief it was trying to prevent.
• Enforceability of a covenant can involve a detailed interrogation. This involves examining which land benefits from the covenant and whether it was intended to serve only the original parties or their successors. A factual determination of this concept and the specific language used will vary on a case by case basis.
• Restrictive covenants are enforceable in court and breaching them can lead to legal action, including the risk of an injunction or claim for damages. In some cases, insurance may be available to mitigate this risk, but it’s often limited or costly.

What should you do if a restrictive covenant affects your land or property?

1. Review the scope of the covenant:

Try and understand the specific restrictions imposed by the covenant – for example, does it prevent your intended use for the land? Check whether the covenant applies to your current use and/or any planned developments. Planning consent doesn’t override a covenant, so both must be addressed.

2. Consider applying to remove or modify the covenant:

Some restrictive covenants can be modified or discharged through an application to the Land Registry application. This requires satisfying specific criteria and evidencing the covenant is outdated or overly restrictive in the modern context of use. It’s recommended to get legal advice as this can be quite a complex and time-consuming process, but it can unlock land value.

3. Consult a solicitor:

Seek legal advice to explore your options. Our expert team can assess the covenant’s enforceability and advise on whether it can be challenged or released.

If you are potentially affected by a restrictive covenant, our team would be happy to discuss your situation and explore what options are available.