What happens when you are buying a home and it emerges there’s a restrictive covenant attached the land? Mark Morton helps a reader with a conveyancing conundrum
The Question
My wife and I are looking at buying a cottage which is in a rural area and borders onto farmland. We have heard, from another neighbour, there is a covenant on the neighbouring land which means we could not build anything on our land. Several buyers have pulled out in the past because of this.
Before we spend money on conveyancing, we wondered if such a covenant could exist. Can a rule regarding one property/land impact a neighbouring property/land?
My wife wants to build a stable for her horses, so the covenant – if valid – would be a deal breaker for us.
Mark’s Answer
Firstly, it is important to note that this kind of covenant is called a ‘restrictive covenant’. A restrictive covenant is an enforceable clause that limits/ prevents how a property is utilised.
The beneficiary, also known as the covenantee, has the right to enforce the restrictive covenant. In this case the beneficiary is likely to be the neighbour as they are benefitting from preventing you from building anything upon your land. We would suggest checking if the restrictive covenant is also present in your own title.
How restrictive covenants work
The law relating to the enforcement of restrictive covenants is hugely complicated.
When looking at covenants which were imposed many years ago it is sometimes impossible to determine with any certainty whether the covenants are still enforceable and, if so, by whom.
The situation is compounded since the burden of the covenant (i.e. the promise not to do something) is registrable at the Land Registry whereas the benefit of the covenant (i.e. the right to enforce the covenant) is not.
Therefore, it is not possible simply by looking at someone’s title deeds to see if they have the right to enforce a covenant, and instead manual research would be required to form a proper opinion.
When covenants are created, they are sometimes expressed to be for the benefit of a specified area of land.
So, for example, if you sold part of your garden to your neighbour – let’s call him A – a covenant by him not to build on the land should be worded so as to benefit not just you personally but all of the land you are retaining.
This means that were you then to divide up your remaining land and sell half of it to another neighbour – I’ll call him B – then B would also be entitled to enforce the covenant against building against A since B now owns part of the land which has the benefit of the covenant.
If you then divided up the remainder of your land into 10 separate plots, and sold each of them to different people, each of those 10 plot owners would also be able to prevent A from building on the land you first sold to them.
Where the consent of someone under a covenant is required, you will therefore see that, in some cases, although it was originally intended that only one person would have to give consent, it is possible that the consent of many people may be required where the land having the benefit of the covenant has been divided and sold in separate plots.
What’s the solution?
Should you wish to do anything in the future which might constitute a breach of covenant then you could consider title indemnity insurance.
The insurance is easy to arrange and relatively cheap, often no more than a few hundred pounds (this would be a single, one-off payment).
The insurance is designed to protect you financially should anyone come forward and claim that they are entitled to enforce a breach of covenant against the property you are buying.
If such a claim were made, the insurance company would negotiate with the claimant either to obtain a release of the covenant, or to secure the necessary consent at no cost to you.
In order to obtain such insurance, it is however a requirement that no contact be made with anyone thought to have the benefit of the covenant and that the existence of the policy not be disclosed to any third party.
Mark Morton is a residential conveyancer at Parfitt Cresswell (Banstead Office)
Meet our expert
Mark Morton is a residential property licensed conveyancer for Copley Clark (the trading name of Parfitt Cresswell). He has a career spanning two decades and joined Parfitt Cresswell in February 2020.
If you would like to ask him or one of his colleagues a legal question connected to your home or related finances email kate.saines@emap.com
