Dealing with restrictive covenants can feel daunting, especially when they limit what you can do with your property. Restrictive covenants can limit use and/or development potential of land. It can be possible however to relax or remove a restrictive covenant in certain situations.
Below we attempt to explain the steps you might consider taking to remove or relax restrictive covenants- the factors the court will consider, and why getting legal advice from litigation specialists can be appropriate.
What Are Restrictive Covenants?
Restrictive covenants are rules that are tied to land. These are often written into a property’s deeds that limit what the owner and ‘successors in title’ can do with that property. As these covenants (think contract clauses) are tied to the land however, they continue even after a property/land is sold.
Slightly confusingly there are also business restrictive covenants known as post termination restrictive covenants. We consider these further here.
This page is focussed on restrictive covenants that are attached to land. These are designed to protect the value of land, and the look and fee of an ‘area’ or neighbourhood in the context of any future development or use of property or land.
Covenants are legally binding, are attached to land and transfer with land whenever it is sold, so the covenant does not “end” when a new owner takes over ownership of the land. New owners must adhere to the same restrictions as previous owners, unless they can find legitimate reasons to change the position.
For the above reasons investigating and understanding restrictive covenants is incredibly important for anyone considering to develop part of land, or change the use of land. Converting a garage to an office can be effected by a restrictive covenant, or restrictive covenants can render it impossible to demolish and develop multiple properties.
In order for restrictive covenants to exist there must be ‘dominant’ and ‘servient’ land. Usually historically current ‘plots’ will have been created out of larger blocks or estates of land. At that time restrictive covenants were often created and included limiting what could be done in future.
If you breach a restrictive covenant, the people who benefit from it, the dominant land owners, can take legal action against you. This can be quite serious such as obtaining injunctions preventing XYZ, and/or claiming for damages and legal costs. Any changes made in breach of the covenant can be undone.
Examples of Common Restrictive Covenants
Restrictive covenants are legally binding and limit what you can do with your property. Common examples include:
- No Commercial Use: This type of covenant prohibits using a property for business purposes. It’s most commonly used in residential areas to maintain a peaceful environment and prevent noise and traffic from commercial activities.
- Building Restrictions: These covenants limit the type and scope of construction on the property. For example, you might not be allowed to build additional structures, like garages or extensions, without prior approval from a specified authority.
- Appearance Restrictions: Covenants can dictate specific aesthetic requirements, like the colour you can paint your house or the type of fencing you can install. These are most commonly used in historic neighbourhoods or conservation areas to maintain a uniform appearance.
- Use of Land: Further to the “no commercial use” covenant, some covenants restrict how the land can be used further, such as prohibiting farming or keeping certain types of animals. This type of covenant is usually used to avoid disrupting the community.
- No Subdivision: This covenant prevents the owner from subdividing the property into smaller plots. It’s often used to preserve the size and character of properties in rural or suburban areas.
Can a Restrictive Covenant Be Relaxed or Modified on a Property?
Before considering your best approach and next step its first incredibly important to be clear on whether a restrictive covenant actually exists and/or is binding. If it is not binding and/or can no longer be effective, it might be that the easiest route is to simply remove it.
The Law of Property Act 1925 allows for an application to be made to have a covenant modified or discharged in certain circumstances. Generally speaking you need to demonstrate one or more of the following:
- That the covenant is no longer needed due to area changes;
- That the covenant prevents reasonable use of the property;
- That there are no beneficiaries who would be adversely affected by the change;
- That the covenant doesn’t provide any practical benefit to the beneficiaries;
- That the covenant beneficiary has expressly or impliedly agreed to the modification or release;
- Tha the modification or discharge will not cause harm to nearby residents or occupants;
- That the covenant is time-bound and can be removed when the stated period ends;
- That the covenant is of little benefit to the beneficiary;
- That the covenant is within a neighborhood, housing estate, or development that has changed significantly since the covenant was established;
- That the covenant is badly drafted and is ineffective;
- That the covenant is not binding on new owners because of some technical issue such as failure to register;
- That the covenant is personal and is not, never was, attached to the land; and/or
- That the covenant goes against public policy, such as equality laws.
When considering applications the tribunal will consider all the circumstances regarding and surrounding the land and covenant including changes in the area, the covenant’s current usefulness, and potential harm to beneficiaries.
With the passage of time the lie of the land can change significantly, and the useful and utility of covenants can diminish- in time they can become obsolete.
If a review confirms a covenant exists and is binding, in tandem with the above consideration can/should be given to approaching the dominant land owner and seeking an agreement. Often negotiation with the beneficiaries, or dominant land owners, can be necessary.
Beneficiaries might agree to relax or modify a covenant if compensated, which might involve a financial payment or other terms. A commercial view on this type of aspect can be important taking into account the alternatives- the value of the site with the covenant removed, the prospects of successful removal, and the cost; benefit of alternatives to a deal being done.
As litigation solicitors we’re well placed to assist in guiding through the above issues as/when necessary.
How Do I Remove a Restrictive Covenant From My Property?
You can remove a restrictive covenant from your property using the same process as relaxing one. This involves:
- Checking the Covenant is validly present; and whether there are arguments over validity and technical removal.
- Obtaining Consent: Seek approval from the beneficiaries, who are typically neighbouring property owners or relevant public authorities.
- Application to the Upper Tribunal: If consent isn’t possible, apply to the Upper Tribunal (Lands Chamber) to have the covenant removed.
The process is the same because both relaxing or modifying, and removing, the covenant alters the legal title and covenants impacting the property and land.
Our team of property litigators would be happy to speak with you if you consider you might be in a situation where a restrictive covenant needs to be addressed and tackled.
Frequently Asked Questions
How Long Does a Restrictive Covenant Last on a Property?
A restrictive covenant can last indefinitely, as it’s tied to the land rather than the owner. It remains in effect until it’s legally removed or modified. However, if they’re explicitly stated, restrictive covenants can have time limits, which are less common.
It is possible for restrictive covenants to become obsolete. This isnt so much after the expiry of time or a time period, but because of other changes to the land. For example if the dominant and servient land are no longer identifiable, and it isnt clear who benefits from the covenant and/or why it should still exist, these can be powerful reasons for a covenant being removed.
How Much Does It Cost To Remove a Restrictive Covenant in the UK?
The cost to remove a restrictive covenant can vary widely. This is very fact dependent. A usual review and initial advice will cost in the region of £2,000+VAT including, where appropriate, advice and some attempts to negotiate. If negotiations become more protracted costs can increase and can/will be significantly higher if an application is required. It may also be necessary to consider, and to price in, compensation to the beneficiary, and application fees for tribunal proceedings if that approach is required. The fee for applying to discharge or modify restrictive covenants is £880, and the official hearing fee is £1,100.
Need Advice? Contact Helix Law.
We’re expert litigation solicitors acting nationally. Whatever your situation our specialist property litigation team will be happy to help you. Whether you’re looking for initial advice, to remove, relax or modify a restrictive covenant, our team will be happy to help you. Contact us today.