It is quite common for land or property to be subject to covenants which restrict certain use or activity on the land.
What is a covenant?
Covenants are typically created where a land owner sells off a part of their land while wanting to restrict the type of activity which can be carried out on the sold land. This is often so they can, in some way, protect the land they are retaining. Restrictive uses or activities can vary, from constructing new buildings or altering existing buildings to hanging out washing, and everything in between.
However, just because a covenant is listed against the title, it doesn’t necessarily mean that it’s valid and enforceable. Anyone restricted by a covenant, or seeking to enforce a restrictive covenant, should consider the key conditions which a covenant needs to satisfy (following a sale of one of the parcels of land) in order for it to be enforceable.
When are covenants valid and enforceable?
1. The covenant must be for the benefit of the covenantee’s land
If the covenantee’s (the person with whom the agreement is made) land doesn’t benefit, or the wording of the covenant indicates that the benefit may be personal to the covenantee only, the enforceability will be in doubt.
Benefit can come in different forms, the most common being protection from a drop in value, or protection of the enjoyment of the retained land, e.g. by restricting noisy use on the burdened land.
In cases where restrictions may have benefited the retained land at the time of the grant, but no longer do (perhaps due to a change in the nature of the retained land), enforceability may have expired.
2. The covenant was intended to run with the land
In other words, it wasn’t intended to only be enforceable by the owners at the time the covenant was entered into.
This will be determined by looking at the intention of the parties at the time by, for instance, examining the wording of the covenant itself and the omission of certain words which show that the covenant was intended to benefit the retained land.
Unlike with restrictive covenants, rights which are personal to owners will not transfer to a new purchasers of the land.
3. The party seeking to enforce the covenant must own the benefiting land
…or have some other qualifying interest in the land. This can be someone who has entered into a contract to buy the land, or a beneficiary under a will, for example.
4. The benefit of the covenant has passed to the person seeking to enforce it
Usually this will occur on a properly executed purchase, but the wording of the covenant and associated documents will need to be checked to be certain.
5. The purchaser of the burdened land (and every previous purchaser) had notice of the covenant when they purchased the land
A purchaser will be on notice if the covenant is registered at the time of the purchase, either against the title at the Land Registry (in the case of registered land) or as a Land Charge in relation to unregistered land (even if the purchaser did not look at the title!)
However, it is possible for a purchaser to have notice in a different way, such as by being given a copy of the covenant by the seller, or anything containing a reference to it.
Next steps?
Even if all the conditions above are met, and the covenant is enforceable, it may be possible for it to be modified in order to reduce its impact, or even removed altogether by the Upper Tribunal (Lands Chamber). Look out for our related article which discusses the ways in which this can be done.
It is important to note that this article only focuses on covenants which restrict activity. It is possible for land to be subject to a positive covenant, i.e. a covenant requiring a certain activity to be carried out. Those covenants are subject to a different set of rules.
The law on covenants is highly complex and what I’ve outlined here only gives a brief and introductory overview (and is not intended to be relied upon as comprehensive advice). In particular, further minor conditions may also apply which are beyond the scope of this article.
If your property is subject to, or has the benefit of a covenant, whether positive or restrictive, we recommend you seek advice.
Contact Louise James or Claire Bunton in our experienced Property Litigation team to see how we can help by emailing contact@duttongregory.co.uk or calling 02380 221344.
