How to Remove a Restrictive Covenant
In this article we explain what restrictive covenants are, how they are created, how to obtain copies of them, and what steps to take to show they are no longer valid, or to remove or vary them.
What is a Restrictive Covenant?
Before explaining how to remove a restrictive covenant it helps to understand what a restrictive covenant is, and why is was created.
Restrictive covenants are legally binding promises made by the owner of a property, which also bind subsequent owners of that property, not to do certain things. Examples include such things as: not to use the property for certain purposes, not to store certain items in the property, not to remove a fence, not to install satellite aerials, not to park a caravan, not to erect other buildings on the property, etc.
A common mis-understanding is that where planning consent is given or not needed, that regard need not be had to a restrictive covenant that would bar the planned development. Planning law is entirely separate from land law, and it is not likely that planners would know about or have regard to the existence of restrictive covenants, when making planning decisions.
Why are Restrictive Covenants created?
A restrictive covenant is always made so as to benefit the property. Modern housing estates often contain many restrictive covenants as the developers are anxious to maintain an attractive appearance to the estate, which helps with sales and maintenance. Other reasons for creating them are to prevent the presence of obnoxious smells, fire-hazards, industrial activities in a housing area, and so on.
How to obtain details of Restrictive Covenants affecting a Property
The Land Registry Title Register of every registered property contains succinct details of all restrictive covenants affecting it. They will be found in the C section of the Title Register, which details the matters that burden the ownership of a property. Restrictive Covenants are created in a Deed, e.g. a Transfer Deed, or Conveyance. This document will provide complete details of the restrictive covenants it creates, which may not be the case with the Title Register. Where the covenants affect only part of the land the Title Plan will show that part of the land is tinted or hatched in a particular colour, the meaning of which is confirmed in the Title Register.
Accordingly, the best way to obtain details of restrictive covenants is to obtain the Title Register, Title Plan and Conveyancing Deeds; without all three documents you may not have all the covenant detail. All three of these documents can be obtained by select the button below. Please select the Title Plan and Conveyancing Deeds options to make sure all documents are obtained.
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Breaching a Restrictive Covenant
If a restrictive covenant is breached this may result in a suit for damages, whether or not the breach was intentional. This could result in your being required to pay substantial damages and/or reversing or altering the development you have made. An injunction is also likely to be obtained, which would bar you from proceeding with any development until after the matter has been finalised, and this might be a considerable time.
The benefit of restrictive covenants run with the land, i.e. they will continue to bind the owners of the property forever, so long as three conditions are met:
- They are not personal in nature
- They benefit the property rather than the individual beneficiaries of the covenants
- The covenants "touch and concern" the property, which means that they must affect how the property is used or affect the value of the property.
Over the passage of time some restrictive covenants no longer serve a useful purpose, and rather than benefitting the property, may have the opposite effect. In such cases you may be able to have them removed. You should note, however, that damages may be obtained against you even if you breach an obsolete covenant, and so it is always safer to have it removed or varied. The beneficiary of the covenant only has to show that the three conditions above still subsist.
Removing or Varying a Restrictive Covenant
The following procedure should be followed, in the order listed:
1. You will need to check the Land Registry documents, including the Conveyancing Deeds relating to the Covenant. In particular, you will be looking closely at the wording of the covenants to see if you are actually in breach. You will also be looking to identify the beneficiaries of the covenant as only they can bring an action against you. For example, if the beneficiary of the covenant is a development company that no longer exists, and the benefit of the covenant has not been passed on by it. You would be checking to see if the covenant alleged to be breached is in fact registered in the documents. If you can find no trace of it in the Title Register it may not have been registered and therefore not binding. Reading the whole of the Deed creating the covenant will also assist you in determining whether the covenant was actually intended to run with the land, as opposed to being a personal covenant, not a restrictive covenant. One way to check this is to see if the covenant has been registered in the C section of the Title Register (where restrictive covenants are detailed) or in the B section (where personal covenants are detailed). You should also look to see if there are any Deeds of Releases or Deeds of Variations referred to in the Title Register, and obtain copies, as the covenant may have already been removed or released.
2. Consider whether you wish to cover the risk by indemnity insurance. This must be considered before the next step as a prior approach to the beneficiary of a restrictive covenant may retard your success in obtaining indemnity cover, or obtaining it for a reasonable price.
3. Write to the beneficiary of the covenant. This may require obtaining further Land Registry documents to trace his current address. Your letter should set out your reasons for wishing to remove or to vary the covenant. If he agrees he is likely to require compensation. It is usually best to consult a solicitor to do this for you, as a Deed of Release or Deed of Variation will need to be prepared and registered. It is likely that in order to reach a settlement there will be several meetings or telecons in order to address both sides of the dispute, and to reach a fair settlement. This is likely to be far less expensive than court proceedings. Your solicitor may also advise using a mediation service.
4. The last course of action would be an application to the Upper Tribunal (Lands Chamber). They have power to vary or discharge the restrictive covenant, but will usually make an order that you pay compensation to the covenantee. In calculating this sum they will have regard to the increased land value and will normally order that you pay about 30% of the value the land has increased by.