When purchasing a property, you will be purchasing the use of a piece of land, even if buying with leasehold. This land may have something called a covenant attached it, which will affect how it can be used. This can affect what you can and can’t do when living in the property.
What is a covenant?
A covenant on a piece of land attached to a property is essentially a rule, or set of rules, about what you can and cannot do as the owner. If you purchase the property with an existing covenant, it means you have agreed to abide by the rules.
Different types of covenants
There are two common types of covenants: positive and restrictive.
Positive covenant – this is an expectation of an action. By agreeing to this covenant you are agreeing to do something with the land you now own, such as building/maintaining something or contributing financially to a shared space. This kind of covenant is tied to the owner who originally agreed to it rather than the land itself, meaning if the covenant is pre-existing it may not have been passed on to you when signing the lease, unless a conveyancing device has been used. You should get your solicitor to help you figure out if a positive covenant has been passed on to you.
Restrictive covenant – this is in contrast a stipulation of what cannot be done with the property and land. This can mean restrictions on what you can build or what you can use the property and land for. Unlike positive covenants, this covenant is tied to the property and will be passed from owner to owner.
Common examples
Examples of common positive covenants are:
- Erecting and/or maintaining a fence/wall on the boundary of the land
- Contributing to the maintenance of a shared driveway (financially or manually)
Examples of common restrictive covenants are not allowing:
- Extra buildings/structures to be built on the land
- The alteration of the property on the land
- Non-domestic animals to be kept on the land
- The land to be used for business
Some covenants might even mean you can’t hang your washing out, let a property or even have a satellite dish. Find out more about the types of covenants that a property may have.
Why are they needed?
Covenants are generally added to properties (new and old) to maintain some kind of control over the uniformity of the area, protecting the surrounding land that you will now own, and maintaining the value and use of the land/property.
For example, keeping noise at a minimum, not parking lots of commercial vehicles in and around the property and restricting the animals you are allowed could help keep property prices at a maximum and means everyone gets to enjoy the neighbourhood at a certain standard.
What if you break them?
There can be several outcomes of various intensity if you break a covenant you agreed to, whether you did so knowingly or by accident. The breach of covenant can be called out by the party that has the 'benefit of the covenant', this can be the owner of land, the original developer or another party. It is important to find out who has the benefit of the covenant when agreeing to them as this will be the person you will have to answer to if you break it.
Remove the offence – this the lightest outcome, where you will have to get rid of the thing that goes against the covenant. For example, if you built a wall that goes against it you would be forced to take it down.
Pay a fine – one of the more serious outcomes of breaking a covenant, the fine can end up as thousands of pounds, depending on the offence. This will be paid to the person with the benefit of the covenant.
Legal action – in the most dramatic of circumstances you may be taken to court over breaking an agreed covenant
None of these situations are ideal, so it’s important to be aware of any covenants prior to making an offer on a property and checking that what you’d like to do in the property, for example let it to students or holiday makers with your conveyancing solicitor so they can advise what you can and can’t do in the future.
Can you change/remove them
It is not currently possible to remove a positive covenant from a property, as they are tied to the owner not indefinitely passed on with the land. However, as a restrictive covenant is tied to the land and is passed from owner to owner, The Lands Chamber of the Upper Tribunal has the jurisdiction to change or remove them.
The most common reason for having a restrictive covenant removed or changed is that because it has been passed on for so long it has become obsolete and/or is negatively impacting the ability to improve the value of the property, however this would have to proven in some way.
If you want to remove or change a restrictive covenant you should seek professional legal advice via your conveyancing solicitor.