How To Overcome Problems With Land Covenants In the UK

If you are currently going through the process of buying land, it is essential to check whether there are restrictive or positive covenants on the title register. Your conveyancing solicitor will check if there are any covenants in the title register and explain their implications before you proceed with your purchase. In this article, we will discuss what a positive covenant and a restrictive covenant are and how to overcome problems with land covenants. 

What is a positive covenant?

Positive covenants place obligations on land owners to take positive action or do something that requires an expenditure of money. This is different from a restrictive covenant, which is intended to limit the use and enjoyment of land. A positive covenant may include the requirement to carry out repairs or maintenance, erect buildings or boundary fences, and pay money if planning consent is obtained.

It is important to bear in mind that the legal obligation to observe a positive covenant over land generally does not travel with the land. In other words, it is not enforceable once the land is sold to another owner.

What is a restrictive covenant?

A restrictive covenant places restrictions on the use of land for the benefit of another’s land (this is referred to as the ‘dominant land’). Crucially, unlike positive covenants, restrictive covenants are enforceable against successors in title. In other words, they are passed down between each successive owner of the land. They may also be enforceable by one party’s successors in title against the other’s successors in title.

Restrictive covenants may be used to:

• Limit the use of the land (for residential purposes only)
• Prohibit certain types of trades or businesses
• Forbid undesirable activities or potential nuisances.
• Restrict the number or type of buildings that can be erected, or
• Restrict the height of buildings.

One example of a restrictive covenant in the leading case of Tulk v Moxhay [1848] EWHC Ch J34 stated that the land owner should “Keep and maintain … [a] piece of ground and square garden, and the iron railing round the same in its then form, and in sufficient and proper repair as a square garden and pleasure ground, in an open state, uncovered with any buildings, in neat and ornamental order.”.

Do I have to abide by a covenant on my land?

Yes, it is better to assume that you must abide by the restrictive covenant on our land unless you are advised otherwise by a commercial or residential property Solicitor. Always remember, it is no defence to say that you were not aware of the covenants on your land. Breaching a land covenant can lead to a financial penalty, an award of damages and potentially an injunction.

A restrictive covenant will normally be legally enforceable between the original contracting parties, but it may not be if it is:

• Too uncertain or ambiguous to be capable of enforcement.
• Prohibited by competition law and is unenforceable, of
• Contrary to public policy, for example, it contravenes equality laws.

If you believe that a covenant is not enforceable, you may be able to ask the Lands Tribunal to intervene in accordance with the Law of Property Act 1925 (LPA) s84 (1). This states, “The Lands Tribunal shall… have power from time to time, on the application of any person interested in any freehold land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon, by order wholly or partially to discharge or modify any such restriction”.

What power does the Lands Tribunal have?

The Lands Tribunal has the power to discharge or modify a covenant under s84(1) of the Law of Property Act (LPA) under the following grounds:

• If changes in the property, neighbourhood, or other circumstances make the covenant outdated, the Tribunal may discharge it.
• If the covenant restricts reasonable public or private use of the land, the Tribunal can modify or discharge it.
• If those benefiting from the restriction have, by their actions or omissions, implicitly or explicitly agreed to its discharge or modification, the Tribunal may proceed, or
• If discharging or modifying the covenant will not harm those benefiting from it, the Tribunal can take action.

Based on the circumstances of the case, the Tribunal can require the applicant to pay compensation for any loss or disadvantage caused by the discharge/modification, or the reduced value the covenant imposed when the land was originally sold.

Is restrictive covenant insurance an option?

It may be possible to take out covenant insurance, but not always. When applying for restrictive covenant insurance, the seller must confirm certain facts, such as whether they are aware of any covenant breaches. If the person benefiting from the covenant (the covenantee) is aware of an actual or potential breach, the insurance will not be valid. For this reason, the insurance is usually only applicable if the covenantee is uncontactable, their identity is unclear, or they are unaware of the breach. The policy is designed to cover legal expenses and any compensation if the covenantee later tries to enforce the covenant.

Typically, the seller is expected to cover the cost of the insurance, but this depends on what is agreed between the buyer and seller. It is also important to note that insurance does not fix the specific covenant issue itself; it just offers protection if any claims are made later.

Final words

Positive or restrictive covenants affecting land can lead to complications if they are not fully understood. It is always vital to seek trusted expert legal advice to ensure you fully understand all covenants, their possible implications and their potential impact on your intended use of the property.

To talk to us about buying or selling a residential or commercial property in the UK and the documents you will need to provide, please call 024 7664 1642 or fill in our contact form.