Restrictive covenants for property

Many types of property - both commercial and residential - often come with various rules about how the property can and cannot be used; these rules are known as restrictive covenants. Restrictive covenants are written into the deeds of the property by the seller (known as the beneficiary) and need to be agreed to by the purchaser. Read on for more information on restrictive covenants.

There are a wide range of common restrictive covenants, including:

  • Preventing alterations to be made to the property (eg conversion of a house into flats or building extensions)
  • In the case of land which is sold, preventing the erection of any new buildings on the land
  • Preventing land from being used for any business purposes
  • Restrictions relating to access over land
  • In terms of leasehold flats, there are often a variety of restrictive covenants designed to maintain shared conditions of communal living (eg keeping of pets, regulations on noise etc)

Other restrictive covenants are created specifically for a certain scenario - eg in the case of commercial properties which are sold, there may be a stipulation that the property cannot be used by a business which directly competes with the seller.

Some restrictive covenants last a set amount of time whilst others last indefinitely. It's important to note that restrictive covenants are passed down with the land; when the property or land is sold, the new owners are bound by the same rules. This means that it is vital for prospective buyers - particularly those who intend to develop the land or make significant changes to the property - to ensure they are aware of any restrictive covenants prior to going ahead with the sale.

Ask a lawyer to help check if a property is encumbered by restrictive covenants. You can also check the property by searching on the Land Registry website website.

A property owner who breaches a restrictive covenant may be liable to:

  • Pay compensation (to the beneficiary of the restrictive covenant)
  • Stop any work which has brought about the breach (subject to an injunction)
  • Rectify the breach (eg demolish an extension which has been built in contravention of the restrictive covenant)
  • In the case of a business, it may need to cease trading at the property if its use of the property (for business purposes) breaches the restrictive covenant

If a property owner who has already breached a restrictive covenant wants to sell their property, they should Ask a lawyer for advice. It may be possible to purchase indemnity insurance which covers issues such as enforcement and potential reduction in property value etc.

The first step in changing or removing a restrictive covenant will be to speak to the beneficiary of the restrictive covenant to find out if they are willing to come to a new agreement. If this approach is not successful, the property owner can apply to the Lands Chamber of the Upper Tribunal to have the restrictive covenant modified or discharged. Ask a lawyer to help with this process.

In Scotland, the concept of restrictive covenants does not exist. Instead, such restrictions take the form of title conditions known as ‘real burdens’. An examination of a property’s title deed may reveal whether a real burden exists.

A real burden places an obligation on the land owner (the owner of the burdened land or property) to either do something or to refrain from doing something. The owner of the benefited property (the property that gains something from the burden placed on the other land) will be able to enforce the burden.

There is a difficulty in enforcing real burdens as, while real burdens are required to be registered on the title deed of the burdened land, there is no such requirement for the benefiting land. As a result, the owner of the benefiting land may have the right to enforce the burden without knowing it (and may thus not know how to remedy a breach of the burden).

Types of real burdens

There are a wide range of real burden, most commonly found in cases of plot subdivision or ‘community real burden’ (where a large plot of land was bought by a developer, built into an estate and then sold individually).

Duration of real burdens

Real burdens will, unless clearly stated otherwise, continue without change for the lifetime of the property.

Removing and changing real burdens

Real burdens can be changed (also known as ‘varied’) or removed (also known as ‘discharged’) in a number of ways. These include:

  • By agreement between the parties (the owner/s of the burdened and the benefited lands)

  • By the Lands Tribunal of Scotland

  • By breach if:

    • The owner of the benefited property does not object to a breach of the burden

    • No one has an interest in enforcing the burden

    • A number of years has passed (also known as ‘prescription’)

Where an individual wishes to breach a neighbour’s community rights (with their agreement) a notification procedure must be followed. This procedure involves notifying all owners of properties within a certain are of the intention to breach the community right.

Ask a lawyer to help with the process of varying or removing a real burden over property.