Understanding property covenants: your complete guide
When searching for a new home, buyers should be mindful of property covenants. These legal obligations could impact your long term plans for the property, and breaching a covenant can result in significant costs. This guide will help you understand covenants on property, the different types, and what they mean for you.
What is a Covenant?
A property covenant is a legal stipulation in the title deeds of a property that new owners must adhere to. These covenants usually apply indefinitely, so it's crucial for buyers to be aware of any covenants affecting the property they are considering purchasing.
The Different Types of Covenants
Property covenants fall into two main categories: restrictive and positive.
Restrictive Covenant
Restrictive covenants are the more common type of covenant and impose limitations on what the property owner can do within the property's boundaries. These covenants often restrict building works or certain uses of the property. There is always a party that benefits from the restrictive covenant and holds the right to enforce it.
Positive Covenant
A positive covenant means that the landowner has to perform a specific action or contribute financially to something within the property's boundaries. These obligations, referred to as "burdens" in legal terms, usually involve two parties: the party responsible for the action and the party benefiting from the covenant.
Common Examples of Covenants
Restrictive Covenants
- Preventing alterations to a property, such as building an extension or converting it into flats
- Prohibiting the construction of buildings or substantial structures on a section of land
- Restricting commercial activities or businesses from operating on the property
- Forbidding the keeping of livestock
Positive Covenants
- Maintaining a fence or shared driveway, or other shared areas in the property
- Repairing a shared roof
Why Are Property Covenants Needed?
Covenants are established by landowners to control how the land they are selling will be used and maintained. They often date back to when land was initially sold, such as from a greenfield site to a residential developer. A seller might insert a restrictive covenant to ensure the area remains residential or that any permitted building alterations preserve the character of the neighbourhood.
What Happens if You Break a Covenant?
The consequences of breaching a covenant depend on its specific terms. Violations could result in the need to undo significant projects, like extensions, if they are not permitted by the covenant. Additionally, you might face financial penalties or legal action. So it is essential to review your property deeds carefully before undertaking any major changes.
Can You Change or Remove Covenants?
If you find a covenant on your property deeds that seems unreasonable, you can apply to the Lands Chamber of the Upper Tribunal to modify or discharge it. However, this process can be costly and take time. In cases where the covenant's beneficiary faces losses from its removal, you might have to pay compensation and cover legal fees.
Frequently Asked Questions about Property Covenants
How to Find Covenants on Property
When purchasing a property, ask your conveyancer to thoroughly review the title deeds for evidence of any covenants. Once you sign the deeds, these covenants become your responsibility. Breaching a covenant, even unknowingly, makes you liable for any legal or financial consequences.
Should I Buy a House with a Restrictive Covenant?
The impact of a restrictive covenant depends on your intentions for the property. If the covenant prohibits activities you weren't planning to pursue, such as building extensions, it may not affect your decision to buy. However, if you intend to develop the land, it's crucial to check for restrictive covenants beforehand.
Are Property Covenants Legally Binding?
As long as they are properly established, covenants are legally enforceable. It's important to understand whether a covenant "runs with the land," which means that it applies to all future owners of the property, or was only enforceable on the first owner.
How Long Does a Covenant Last on a Property?
Covenants generally do not expire and remain in effect in perpetuity. Even covenants from the 19th century or earlier retain their legal status. However, some very old covenants may be deemed unenforceable if they relate to outdated practices or if the original parties cannot be traced.
What Does Deed of Covenant Mean?
A deed of covenant is a legal document in which the party subject to the covenant agrees to fulfil its obligations.
Contact Darlows for Help with Your Property Search
If you're interested in buying a property, contact your local Darlows branch today. Our experienced team is here to assist you with all aspects of your property search, making sure you have everything you need for a successful move.
