Restrictive Covenants Affecting Land – A Summary

Manisha Bhula and Jessica Smith, in our Residential Property team, explain restrictive covenants affecting land, including enforcement action.

A restrictive covenant is an agreement between landowners whereby one party agrees to restrict the use of their land for the “benefit” of another party’s land. A restrictive covenant requires the covenantor (the party agreeing to restrict or “burden” the use of their land) not to do the thing specified (e.g. not to use the land for anything other than residential purposes).

The burden of restrictive covenants

Unlike positive covenants (which impose positive obligations on landowners), the burden of restrictive covenants are said to “run with the land” which means that successive owners or occupiers of the restricted land are bound by the restriction. This is enforceable where:-

• There is land which benefits from (i.e. is “touched and concerned”) by the covenant;
• The burden of the covenant was intended to run with the land; and
• The successor in title has notice of the covenant.

For covenants created on or after 1 January 1926, registration of restrictive covenants at HM Land Registry has taken the place of giving notice. In the case of unregistered land, a restrictive covenant must be registered as a D(ii) land charge. In the case of registered land, a notice must be entered in the Charges Register. Solicitors and other legal advisers will search for this information in order to advise purchasers whether the property is burdened by a restrictive covenant.

The benefit of restrictive covenants

The benefit of restrictive covenants is automatically annexed to the land of the covenantee (the party agreeing to benefit from the restriction of another party’s land) – but only if:-

• The covenant touches and concerns the land intended to be benefitted;
• The land intended to be benefited is easily identifiable from the terms of the transfer and evidence and is capable of being benefitted by the covenant at the time it is imposed; and
• There is no express contrary intention.

Importantly, it can be difficult to identify exactly who has the benefit of a restrictive covenant. Even where the initial agreement is clear, subsequent sale of land in parts can result in a situation where the benefit of a restrictive covenant is divided between a large number of occupiers and owners.

Discharge or modification of restrictive covenants

Restrictive covenants can be discharged or modified in a number of ways.

• Application to The Lands Chamber of The Upper Tribunal under Law of Property Act 1925, Section 84. The most commonly used grounds are that the restrictive covenant has become obsolete or that it impedes reasonable use or development of the land.
• Application to The County Court. It is possible to seek an order declaring that the restrictive covenant is not enforceable.
• Negotiation between parties for a release or modification of the covenant. Caution: the original restrictive covenant remains on the Title at HM Land Registry and, therefore, there remains a risk that someone else will claim entitlement to enforce the restrictive covenant.

Restrictive covenant indemnity insurance

This is often a quicker and less expensive alternative to litigation. Such insurance policies are most commonly bought by the purchaser of a property where the seller (or previous owner) has breached a restrictive covenant. Note: it will not be possible to obtain insurance cover once proceedings have been issued in The Lands Chamber or The County Court.

Enforcement of restrictive covenants

The main remedy for breach or threatened breach of a restrictive covenant is an injunction. If the breach is yet to be committed then an injunction is likely to be awarded. An injunction may even be awarded after the completion of building works on land burdened by a restrictive covenant not to build or erect any further structures (Mortimer v Bailey [2005]).

Alternatively, the court has the power to award damages in lieu of an injunction.

For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.