You may think that once you own your home, particularly in the case of freehold properties and land, that you can do whatever you like to it, albeit within the bounds of local planning guidelines and building regulations. Well think again. The title deeds of your property could have covenants that may include obligations or restrictions regarding your land and property.
So, what exactly are covenants and how can they affect the enjoyment of your home?
What is a covenant?
A covenant is a binding condition that is written into a property’s deeds. It’s essentially a promise to do or not to do something. A covenant determines what a homeowner can and can’t do with their house or land under certain circumstances. A covenant can be negative (usually known as a restrictive covenant) or positive. Covenants are usually written into the deeds by the original land owner or developer.
What is the difference between a positive and negative covenant?
Positive covenants usually refer to obligations and involve some sort of action to be taken or expenditure, such as the upkeep of a wall on the boundary of the land, or pay maintenance costs for a shared private road.
Restrictive, or negative covenants, are rules preventing certain things, such as the keeping of animals that aren’t pets (i.e chickens or pigs), using the property for business purposes or a restriction on building on the land without consent from the party who has the benefit of the covenant. An example of a restrictive covenant on a housing development is the restriction of deviation from the appearance of the units. A restrictive covenant can be enforced by the courts.
Covenants are designed to give the original owner of the land some say over what is done on the land or to the properties on that land. A restrictive covenant could have a significant impact on the value of your property. For example, if your property has significant land, but a covenant dictates that only a single use dwelling is allowed, it will have an impact on development potential.
Where are your title deeds?
The Land Registry is a good place to start when trying to track down your title deeds, although they only have a digital copy of the original deeds when land or property is registered for the first time. Original paper title deeds will be held by whoever lodged them. They could be with the solicitor who acted for you, or your mortgage company.
Are all covenants automatically passed on when a property is sold?
Not all covenants are passed on when land is sold on. Positive covenants do not ‘run with the land’, which means they don’t automatically get passed on when the land is sold on. To get around this, the deeds may require that new owners enter into a deed of covenant with the benefit of covenant and that they will not sell the land unless a similar deed is obtained from any subsequent sale.
However, courts have developed a principle by which to deal with cases where a burden of positive covenant is refused when there is a corresponding benefit, which most specifically applies to the right of way. For example, if a positive covenant for maintaining a private road isn’t passed on, but the new owner expects to be able to use the private road without contributing to its maintenance, a court will normally enforce the burden of the covenant. In other words, to use the private road it is reasonable to contribute towards the cost of maintenance.
However, restrictive covenants are passed on in property sales as they ‘run with the land.’ If you are buying a freehold home, it is important to check the small print for covenants.
Why you should check covenants before carrying out any home improvements
Before you get started with any major DIY projects, it’s a good idea to carefully check your deeds for any covenants. For example, if you plan to add a conservatory or a build a swimming pool, there may be covenants preventing such development.
What happens if you breach a covenant?
Breaching a covenant is never a good idea. If you build an extension that breaches a covenant, the person who owns the land that benefits from those covenants could apply for a court order requiring you to remove the extension and pay compensation. It could cost you thousands of pounds to put things back how they were.
What can you do about a restrictive covenant?
You can apply to the Lands Tribunal to have restrictive covenant modified or discharged. Under the Law of Property Act 1925, a covenant can be fully or partially discharged or modified if:
- The restriction ought to be deemed obsolete because of changes in the property or the neighbourhood
- There is agreement to the discharge or modification between all those with the benefit of the restriction
- The proposed discharge will not affect the persons entitled to the benefit of the covenant
- The covenant restricts reasonable use of the land and confers no practical benefit on the persons entitled to the benefit, or it is contrary to public interest
In summary, it’s always a good idea to seek out covenants before you buy land or property, or if you aren’t sure what’s in your deeds and want to carry out any major home improvements. Even something as simple as putting up a shed may be preventable by a restrictive covenant. The laws around covenants can be complicated so it is best to seek legal advice before you embark on any property development or extension.
Legal indemnity insurance can prove useful as it can offer some type of solution for restrictive covenant issues or at the least some protection if things go wrong.