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Removing a Restrictive Covenant on Your Property

Restrictive covenants can affect any land or premises. Whether you are planning to develop freehold land, to extend your existing house, or to change the use of land or premises, you will need to be sure that there is nothing on the relevant title that prevents you from doing so.

Essentially a restrictive covenant restricts the use of land in some way for the benefit of other land, for example:

  • building schemes which impose an obligation on each buyer to enter into restrictive covenants which are imposed by a developer for the benefit and value of the estate generally, such as a covenant against business use

  • covenants that are designed to protect the character of a neighbourhood or guide the long term development of an area, such as a prohibition on alterations to the external appearance of a building; and

  • covenants that impose rules on owners to facilitate communal living, such as regulating the use of a shared access.

Invariably a restrictive covenant binds successors and so even if the original parties to the covenant no longer have any interest in the land, a covenant can potentially be enforced by those who do now.

In order to assess whether a restrictive covenant can be enforced against you, your solicitor will need to review the title to the property to first ensure that the restrictive covenant was properly registered and is valid. Your solicitor will also need to ascertain whether or not the restrictive covenant still benefits or preserves the value of the other land in the way that was originally intended.

If the covenant is not valid then, as a general rule, it cannot be enforced against you.

If the covenant is valid and enforceable there are numerous ways to deal with it. The most common courses of action are:

Consent

If the beneficiary of the covenant is known, you can apply to them for express consent to a release or variation of the covenant. Depending on the wording of the covenant, and assuming that the beneficiary agrees, you will most likely need to pay the legal and surveyor's costs of the beneficiary and, in most cases, you would have to pay a premium. The amount of the premium will be dependant on negotiation and the particular commercial circumstances.

Indemnity insurance

It is possible to obtain indemnity insurance to protect against the risk of a third party enforcing a covenant. However, it is important to note that if insurance is contemplated, the insurance company will probably require that no contact is made with any third party who has the potential of the benefit.

Certain insurance may not be obtainable if the covenants are recent, if objections have already been raised or if the risk of enforcement is high.

Insurance can often be a cheaper option than applying to the Lands Tribunal for a modification or discharge of the covenant and is often used where a quick solution is needed.

Lands Tribunal

If you are not able to obtain indemnity insurance and cannot agree a release or variation with the beneficiary then you may be able to apply to the Lands Tribunal for a modification or discharge of the covenant. This can be a lengthy and expensive process. At best, if there are no objections, it will take three months and considerably longer where there is a dispute.

Essentially the Lands Tribunal will look to see whether the covenant is obsolete, whether it impedes some reasonable use of the land, and that no injury will be caused to the beneficiary of the other land.

Conclusion

This is a complex area of law. There is much case law on the construction of restrictive covenants and the extent to which they can or cannot be enforced.

However, restrictive covenants must not be considered in isolation, in addition you will have to consider and comply with the relevant planning laws and, if you have leasehold premises, any covenants in your lease that regulate how you occupy those premises.

It is therefore important to seek the advice of an experienced commercial property lawyer, such as Hattons Solicitors.

Contact our commercial property team on 08000 111 303 or fill in the Get in Touch form to the right of this screen.

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

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