Restrictive covenants

Restrictive covenants
 

Restrictive covenants on land are undertakings in a deed, negative in nature – that is, undertakings not to do certain things. They are often imposed when part of a piece of land is sold off. The seller wants to make sure that the buyer does not do anything antisocial or undesirable with the land being transferred to him. The deed transferring the land therefore has a negative or “restrictive covenant” within it, specifying what cannot be done on the land being sold .

If A sells part of her large garden to B for development, she will probably wish to impose restrictive covenants on the land being sold, to protect the amenity and value of the land she retains. This will be a matter for negotiation and agreement; in effect, part of the price. (B can equally seek restrictions on the use of A’s land, in order to preserve the amenity and value of the land he is buying.) A and B will both be aware that if they cannot reach agreement, the sale will not go through.

Once in place, restrictive covenants remain in effect not just between the original parties to the deed, but between later owners of the two pieces of land. (With some exceptions, positive covenants don’t bind later owners of the land subject to them.)

In earlier centuries, restrictive covenants were a form of private planning control. Nowadays, they exist alongside the planning system, which is relatively modern – the first Act designed to control the development of land was passed in 1909. Planning law is now a complex and far-reaching system.

Restrictive covenants can control activities such as placing washing lines in front gardens, lighting bonfires at the weekend, or the storage of boats, trailers or caravans: restrictions of this kind are common in modern housing estates. They are there to preserve the amenity of the whole estate, and may have no great effect on the values of properties in the estate. But restrictive covenants can also impose far-reaching restrictions, which have the effect of preventing development, for example:

  • Not more than one house to be built on the land
  • No industrial or commercial use of the land
  • No use of the land for anything other than charitable or philanthropic purposes.

If imposed in modern times, and if they are clear about what they will and will not permit, such covenants will generally be enforceable. But restrictive covenants may go back over long periods of time, and complications may arise. Over many years, as plots of land are split, and land is added to existing plots, it may become difficult to establish what exactly is the land which is subject to, and what land has the benefit of, a restrictive covenant. This is particularly true in the centres of cities and towns, where commercial pressures may cause shops and other properties to need more space, or to be forced to give it up.

It’s also the case that if land is subject to restrictive covenant, and land with the benefit of the restrictive covenant, come into the same ownership then the restrictive covenant ceases to apply, and in effect disappears.

Breach of a restrictive covenant may cause the landowner with the benefit of the covenant to seek an injunction in order to stop the forbidden activities. But an injunction is a discretionary remedy: an injunction is not granted automatically nowadays, since the court will consider whether compensation in money form will suffice. And an injunction is likely to be refused if it is clear that, over time, the landowner with the benefit of the restrictive covenant has given the impression that he is not concerned about breaches of it.

A further complication is that the Lands Chamber (formerly known as the Lands Tribunal) has a special power allowing it to cancel and alter restrictive covenants in certain circumstances. Whether land subject to a restrictive covenant has the benefit of planning permission for development, will be significant, though not conclusive. The Lands Chamber can act in four basic situation:

  • The restriction is obsolete.
  • The restriction impedes reasonable use of the land in question and either (a) it gives no practical benefits of substantial value or advantage, or (b) it is contrary to the public interest.
  • Everyone who has the benefit of the restriction agrees that it should be altered or cancelled.
  • Cancelling or altering the restriction will not harm the people who have the benefit of it.

The possibility of making an application to the Lands Chamber strengthens the negotiating position of a landowner whose land is subject to a restrictive covenant: the Lands Chamber cannot add restrictions, or make exisrting restrictions tighter. However, when the Lands Chamber cancels or alters a restrictive covenant, it can award compensation to the landowner who had the benefit of it, and compensation will go at least some way towards rendering the outcome fair.

While proceedings before some tribunal’s are quite informal, this is by no means so in the Lands Chamber. Its procedure is more like a court’s. That is perhaps understandable given that large sums of the money – the proceeds of development if a restriction is altered or cancelled- are often at stake. Over the years these very important provisions have received much attention from the tribunal, and the courts. Decisions can be hard to predict, since they depend to such a large extent on value judgements.

Possible areas of difficulty, where specialised legal advice may be needed, include:

What the wording of a restrictive covenant actually means, given that the wording is often brief and arguably ambiguous.

Whether it is actually the case that a given piece of land is subject to a restrictive covenant, if it is the result of splits and additions over the years.

Whether the landowner with the benefit of the restrictive covenant has in the past disregarded breaches, and has not given the impression that she does not intend in future to enforce it.

Whether the Lands Chamber would alter or cancel a restrictive covenant, and if so on what terms as to compensation or other matters.

FAQ // Ts & Cs

See also: Obtaining advice, Ownership of land, Private rights of way, Ransom strips.

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