Bowfin Property

Property Solutions to Sell Your House Fast For Market Value

What Is a Restrictive Covenant On Property?

What Is a Restrictive Covenant On Property?

Restrictive covenants are usually created when someone selling land wishes to restrict what the buyer can do with it.
A restrictive covenant on property imposes limits on its use or on any alterations to the property. A covenant dictates what owners can or can’t do, and are aiming at maintain standards, preserving aesthetics, or to regulate shared spaces within a community.

A restrictive covenant on property is a legal obligation or an agreement that limits the way the land or property can be used or developed.

These restrictions are usually outlined in the property’s deeds or in a separate legal document. They can cover a wide range of aspects, such as:

  1. Land Use: Dictating how the land or property can be utilised, such as prohibiting certain types of businesses, industrial activities, or building additional structures.
  2. Alterations and Modifications: Limiting changes or alterations to the property’s structure, exterior appearance, or even landscaping.
  3. Maintenance and Upkeep: Requiring the property owner to maintain specific standards, such as keeping the property in good condition or preserving certain architectural features.
  4. Occupancy: Specifying who can reside on the property, restricting it to a single-family dwelling, limiting the number of occupants, or restricting the age of the persons who can buy the property…for example to age 55 and over.
  5. Time Limitations: Imposing time-bound restrictions, like preventing certain activities during specific hours or days.
  6. Environmental Restrictions: Enforcing environmental regulations or conservation measures on the property.

What are restrictive covenants used on property?

These covenants are typically established by the original developer or landowner, and can be attached to the property indefinitely. The covenants will usually also bind subsequent owners of the property too and in most cases aim to maintain the character, value, and integrity of a property or an area.

What are examples of a restrictive covenants on property?

Some examples of restrictive covenants in leases include not being allowed to keep pets, not being able to let a property as a holiday let on AirBnB, not being allowed to sublet the property, and being restricted from removing or alter internal walls.

There are many different types of restrictive covenants that can have taken out on a property.

Here are a few examples of restrictive covenants on property:

  • Building a property over a specific height.
  • Restricting the owner from parking a caravan or a boat on the driveway.
  • Restricting the number or types of vehicles allowed on the property. 
  • Restrictive the number of dwellings that can be built on the land. 
  • Banning pets or livestock on the property.
  • Disallowing running a business or certain types of businesses from using the property or land.
  • Restricting access to certain parts of the property or land. 
  • Restrictions on certain outbuildings, sheds, hot tubs or swimming pools from being build.
  • Preventing the use of the property for holiday letting, which is common in flats on Airbnb or
  • Restricting the use of satellite dishes, solar panels or CCTV camera on the property.
  • Restriction of using balconies as washing lines.
  • Age restrictions on who can buy the property.

What happens if a restrictive covenant is breached?

A breach of a restrictive covenant can result in legal action, including court orders to stop certain activities or even compensation claims. Before purchasing a property, it’s crucial to thoroughly understand any existing restrictive covenants as they could significantly impact how you intend to use or develop the property.

Consulting legal professionals or conveyancers can provide insight and guidance regarding these restrictions.

It doesn’t matter if you breach a covenant knowingly or unknowingly, as either way you may be forced to undo any work done, you may have to pay a fine, and/or face legal action and costs.

If you have breached a covenant without challenge for over 12 months, then you may be able to take out restrictive covenant insurance to protect any work that you have had done.

Are there positive covenants?

While restrictive covenants limit certain actions or behaviours regarding a property, positive covenants entail specific actions or obligations that a landowner must fulfil.

Unlike restrictive covenants that restrict or prohibit actions, positive covenants necessitate the performance of certain actions or responsibilities.

Positive covenants can include various obligations such as:

  1. Maintenance and Repair: Ensuring the upkeep and maintenance of shared areas or elements that benefit multiple properties, like fences, driveways, or pathways.
  2. Contributions and Payments: Contributing to the upkeep or maintenance of communal facilities or services, such as shared utilities, landscaping, or road maintenance.
  3. Compliance with Regulations: Following specific regulations or requirements set by a homeowners’ association or governing body related to the property’s use or maintenance.
  4. Shared Services: Participating in and contributing to shared amenities or services within a community or housing development, like security, the upkeep of common areas, the upkeep of shared driveways, waste management, or recreational facilities.

Positive covenants are often found in agreements or contracts between property owners, homeowners’ associations, or developers to ensure the collective upkeep and benefit of a community or shared space.

They create a cooperative environment and help maintain standards and services for the benefit of all involved parties. Failure to comply with positive covenants can also result in legal action, similar to breaches of restrictive covenants.

Do new builds come with restrictive covenants?

It is very common for new builds to come with restrictive covenants. These covenants are often imposed by the property developer or builder to maintain certain standards, protect the overall aesthetic or functionality of the development, or preserve the intended use of the land.

Restrictive covenants in new builds might include regulations regarding:

  1. Architectural Design: Maintaining a certain style or appearance of properties within the development, ensuring consistency in the visual aspect.
  2. Land Use: Specifying limitations on how the land or property can be used, such as disallowing commercial activities, home businesses, or subdividing the property.
  3. Maintenance and Upkeep: Outlining responsibilities for property maintenance, ensuring a certain standard of appearance for the homes and surrounding areas.
  4. Community Amenities: Dictating the use and access to shared amenities like parks, playgrounds, or communal spaces within the development.

These covenants aim to protect the overall value and attractiveness of the development, thereby promoting a cohesive and desirable living environment for all residents.

It’s essential for prospective buyers of new builds to thoroughly review and understand any restrictive covenants attached to the property before they buy. This will ensure they align with their intended use and future plans for the property.

Legal advice or consultation with conveyancers can help clarify these restrictions and their implications before purchasing a new build property.

How enforceable are restrictive covenants on property?

How enforceable a restrictive covenant is will depend on whether the original land owner and person who created the covenant is still alive, or if their successors want to enforce the covenant.

But it is important to understand that restrictive covenants are binding not only on the immediate buyer of the property, but also on future owners of that property too.

How to find if you have restrictive covenants on your property?

Here are the main ways to find out if there are restrictive covenants on a property in the UK:

  • Check property documents – Any restrictive covenants should be listed in the property’s register or title deed documents. Carefully go through the title register, filed plan, title plan, as well as any restrictive covenants submitted to the Land Registry.
  • Search the Land Registry – Conduct a search of the Land Registry using the property’s title number. This small fee search will provide the title register documents that outline existing restrictions or covenants tied to the land.
  • Hire a conveyancer – Instruct a licensed conveyancer or solicitor to conduct land registry searches on your behalf. As part of the home buying process, they would review all associated property records to identify restrictive covenants. This ensures complete due diligence.
  • Ask the developer – If the property is part of a housing development, request information on covenants from the original developer. Development plans often include standardised restrictions on aspects like external changes, parking, pets etc.
  • Speak to neighbours – Chat with nearby neighbours to ask about the existence of any neighbourhood covenants or restrictions. Long-time residents may provide useful insights from their own experiences.
  • Check planning permissions – Review any planning documentation associated with the home or surrounding area for references to restrictive rules, permissions needed for changes etc. Physical site visits also help spot signs.

How does a restrictive covenant affect homeowners?

Whilst covenants mostly aim to enhance a neighbourhood and a home’s value, they can be quite limiting for homeowners. It’s important to review all covenants thoroughly before purchasing a property to understand how they might impact living there. Being aware of the restrictions allows buyers to make informed decisions.

Can restrictive covenants be removed from a property?

It is possible to remove or modify restrictive covenants on a property, but the process or removal can be challenging. Here are a few key ways it can be done:

  • Obtain approvals from involved parties – If the covenant relates to just a few neighbouring properties, you may be able to get written approval from those homeowners to alter the restrictions. This documented consent can then be recorded.
  • Apply to the courts – You can file an application with the courts to essentially overwrite the existing restrictive covenant, especially if it is outdated or no longer serves a purpose. However, you’ll need compelling reasons to make the change, and legal costs for the change can add up.
  • Expiration – Some covenants have expiration timeframes after which they can no longer be enforced. If a restrictive covenant has expired, you can have the covenant absolved from property records. But this relies on an end date being set initially.
  • Payment to beneficiaries – Occasionally the covenant benefits specific parties in some way. If you can negotiate terms and pay them an agreed reasonable amount, they may consent to releasing restrictions.
  • Prove obsolete covenants – If neighbourhood characteristics have changed significantly since the covenant was made, thereby rendering it impractical, the courts may declare it obsolete and unenforceable. But evidence is crucial.

In summary – restrictive covenants can be removed, but patience and either legal/financial costs are usually necessary.

Can you sell a property with restrictive covenant?

You can sell a property with a restrictive covenant, as long as the buyer is happy with the restriction. For example, if a property has a restriction to prevent buyers from owning pets and a buyer doesn’t intend to own pets, this will not stop them from buying the property.

However, if a person wants to buy a property and they intend to use it for holiday lets and the property has a restriction to prevent this type of activity, the person will not buy the property. But there will be many buyers who would buy this property as their home instead.

Do restrictive covenants affect property value?

Certain restrictive covenants can affect property value both in a positive way and in a negative way, it will depend on the restriction and on the type of buyers who would buy the property.

For example, restrictive covenants that may negatively affect a property’s value include:

  1. Architectural and design restrictions: If the restrictive covenant strictly limits the style, materials, colours etc. that owners can use on the exterior, this can reduces the renovation potential and personalisation of the property. This loss of flexibility may turn away buyers and reduce its value.
  2. Land use restrictions: Limitations on running businesses, short term rentals, keeping pets, parking RVs or caravans on the driveway may turn away buyers with those plans. Reduced usage will decrease interest or demand and can lower prices.
  3. Nuisance restrictions: Banning lawn ornaments, flags, recreational structures etc. may put off buyers looking for those types of amenity.
  4. Mandatory costs and maintenance: Requiring maintenance or service fees for a community association or enforcing the upkeep of specific common areas like landscaping, amenities can make ownership more expensive over time. This can affect a property’s value in a negative way.
  5. Strict external or internal modification rules: If adding a deck, patio, fencing etc. requires jumping through lots of hoops to get approvals, buyers shy away from these types of obstacle and hassle. This can impact on value in a negative way.

The more burdensome and invasive the covenant terms, the more it hampers an owner’s freedom, which in turn can erode the property’s market value.

I hope you’ve enjoyed this article about what is a restrictive covenant on property

If you’ve enjoyed this article about “what is a restrictive covenant on property” please share it on your favourite social media site.

Also, if you have any questions, please feel free to comment below too. Please also share any of your experiences with properties you’ve bought. Alternatively, if you need more help, please feel free to contact us on our contact us page here. Or join the discussion and ask your question in the property forum.

What Is a Restrictive Covenant On Property?

Article written by Russell Bowyer who has been investing in property since purchasing his first commercial property in the 1990's for his own Chartered Accountancy business. But his first property investment project was to turn an old dilapidated restaurant into a large 5-bed home, which he purchased for £117,500 and sold for £450,000 (to see an "after" photo of the house before it was sold see here: About). Russell owns a number of investment properties, which includes houses, flats and HMO's. More recently he has turned his creative side to investing in property using lease options. His largest lease option deal to date was to acquire 12 properties worth over £2 million for just £12, which means he paid just £1 to acquire each property!

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll to top