Are you in breach of a restrictive covenant?
You may have seen in the news recently that a Yorkshire development company is seeking payments of £100-£300 per household for consent after a covenant in their deeds was breached. The consent is required for such items as the erection of a shed or a satellite dish. The householders may have pay the developer as when they purchased their properties they promised not to erect any such items without obtaining the developers consent.
A restrictive covenant is often imposed on a property when it is sold by developers. The householders should have been made aware of this when they purchased.
What is a restrictive covenant?
A restrictive covenant is an agreement or promise which is included in the deeds and that limits what can be done on the property. An example of a restrictive covenant might be that no caravans can be stored at the front of the property or that no livestock can be kept on the property. The reason why they are often imposed by developers is to keep the estate looking presentable whilst the houses are being sold. Another reason for imposing a covenant might be to make sure that a property is only used for a particular use, such as residential use not commercial or it might limit the number of houses built on land.
Restrictive covenants may be imposed for a period of time, such as not to carry out any structural alterations during the first 5 years or they may be imposed for all time. This is why it is important to check your deeds and make sure you are aware of any that might bind your property.
The Legal Implications
While covenants are often ignored and as owners change are often forgotten about you may still be liable to abide by them. Some possible implications of this could be that you have to pay damages, or apply for retrospective consent or rectify any breach of the restrictive covenant which could have substantial cost implications.
What can you do?
Firstly, be aware. It is important you be made aware of any covenants when purchasing the property. A good solicitor will bring these to your attention when you purchase the property. It is always worth checking your deeds before commencing any substantive alterations or changing the use of your property.
Secondly, consider restrictive covenant indemnity insurance. If you become aware that there is a restrictive covenant which affects your property and that you may be in breach of, then we would recommend you put in place restrictive covenant indemnity insurance. This is usually available for a one off premium and affords cover to you and future purchasers and your lenders. This will often be required if you do decide to sell or mortgage your property in any case.
Thirdly, seek help. If you are or may be in breach of a restrictive covenant or are unable to find suitable restrictive covenant indemnity insurance to cover any potential risk it would be wise to seek professional help to try and find a solution. This can include negotiating for the restrictive covenant to be removed. This is a complex area of law and we would recommend seeking help from a solicitor with experience in this area.
Alison Turner brings an enviable wealth of experience and cool, calm professionalism to our Business Team. Having specialised in Commercial Property for more than 20 years, Alison’s level of expertise is hard to rival.
About Taylor Bracewell
Taylor Bracewell operates from offices in Thorne Road and Ten Pound Walk in Doncaster and Fountain Precinct in Sheffield. Specialist areas are: Family Law, Business Law, Personal Law (including Wills, Probate, Trusts and Conveyancing), Dispute Resolution, HR & Employment Law, Charity Law.
You can contact us at email@example.com or call us on 01302 341 414 in Doncaster or 0114 272 1884 in Sheffield.