GET IT RIGHT FIRST TIME: Sarah is here to help first time buyers get to grips with the conveyancing process. This month she demystifies restrictive covenants and explains how they might affect you…
My solicitor says the property I am buying is subject to a restrictive covenant. What does this mean?
Covenants usually restrict what you can do from or to your home.
They are found in the majority of deeds for UK properties, both lease and freehold, but most of us are unaware of their effect and are consequently at risk of breaching them. This can cause problems if you want to sell. You could also be open to legal action from those who benefit from the covenant, if you fail to comply with its instructions.
Restrictive covenants are put into title deeds to ensure the look or character of an area is maintained, or to prevent alterations or extensions being made to your property, without the consent of the original landowner or developer.
Common covenants restrict:
- Caravans or commercial vehicles from being parked on the property
- The erection of a satellite dish
- Nuisance or annoyance to the owners of neighbouring properties
- The operation of a trade or business from the property
Some covenants, particularly in leasehold properties, can be of an historic nature, for example, “not to run a slaughter house tallow chandler soap-boiler” on the property. Unless you’re keen on making soap the traditional way, you’re unlikely to breach this one!
Your solicitor is right to make you aware of any covenants affecting the house you wish to buy. He or she will also check that they haven’t been breached by the current owners.
It is important to let your solicitor know if you can see the property has been altered or extended, so checks can be made to ensure consent was obtained from the party who set the covenants, before you move forward with the transaction. Likewise, if you want to make significant changes to the house, or use it in a certain way, i.e. rent it out as an Air B&B, you should make your solicitor aware, so you can confirm this is permitted.
How do I go about making changes to my property that impact on the restrictive covenant?
The beneficiary of the covenant tends to be the original developer, local authority, freeholder or landowner. Before doing any work that may breach a covenant, you should ask their permission.
However, if you do carry out alterations without consent, you have two options. Firstly, you can attempt to gain retrospective consent, which could mean you are issued with a charging fee, or your work is refused and you are required to put the property back to its original state. The second option is to put an indemnity policy in place, covering you against any action taken by the covenant holder in respect of the breach.
The consent required for a restrictive covenant is completely separate to local authority approval for planning and building regulations. It is common for property owners to assume that once the latter has been granted, no other permissions are required. It is, therefore, important to check your deeds before any works are carried out.
If covenants have been breached by former owners of your property, your solicitor will ensure the seller puts the appropriate indemnity insurance in place at their expense or obtains retrospective consent.
Restrictive covenants should not be detrimental to your purchase – they are simply something you need to be aware of, to avoid any issues arising in the future.
If you are a first-time buyer with a question about moving home, our residential property expert, Sarah Gaunt, would love to hear from you. Email: firstname.lastname@example.org