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When it comes to construction and home improvements, there is one thing that homeowners and developers alike dread: restrictive covenants.

In short, a ‘restrictive covenant’ is an agreement which limits the usage of one piece of land for the benefit of another. One property owner will agree not to make changes to their own land which would impact the value and usage of the neighbouring plot, which belongs to the ‘beneficiary’.

Once a restrictive covenant is in place it will remain attached to the land in question rather than the people who first created the policy. In other words, even if the plots have changed hands multiple times over several decades, the current owner of the beneficiary land can still enforce the covenant.

In practice a restrictive covenant can have a serious impact on new developments and home improvements. While they are generally seen as outdated, they can still be enforced, even if the covenant is a century old. It is also common for property developers to set restrictive covenants in place in order to prevent any immediate work on brand new homes.

When purchasing a property, it is usually up to your conveyancer to inform you if a restrictive covenant applies to the land. You should also be able to find out by checking the title deed for the property. It is crucial that you know the terms of a restrictive covenant that applies to your home as soon as possible; if you buy a property with the intention of improving it, get planning permission for the work and are then told that a beneficiary is blocking the work, moving forward anyway would result in serious penalties. Even if the work itself does not actually damage the value of the beneficiary’s property, they can still file for compensation from you.

That said, a restrictive covenant is not always set in stone. The Upper Tribunal (Lands Chamber) can decide to amend or remove a restrictive covenant if it is found to be unfair, outdated or if the parties involved want the changes made by mutual consent. However, the process involved can be long and expensive. If you want to challenge a restrictive covenant, make sure that you know exactly what you are in for; depending on how much you are prepared to spend on the changes you want to make to your property, you could find that challenging your restrictive covenant will simply not be worth it.

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Do I need to challenge my restrictive covenant?

Just because a restrictive covenant exists on your property does not mean that you need to challenge it. Making an application to the Upper Tribunal can be a long and expensive process, so it is worth knowing the alternatives.

The most important thing to do is to make sure that you know exactly what your situation is. Exactly what does your restrictive covenant say and who is the beneficiary? How likely are they to utilise the restrictive covenant? If necessary, you can write to the Upper Tribunal to request this information.

Before applying to change or remove your restrictive covenant, consider:

  • Indemnity insurance - This will insure you and your home improvement project in case the beneficiary decides to enforce the restrictive covenant. Indemnity insurance will cover you for damages and compensation, alterations to the your property and the reduced value of the beneficiary’s property. 
  • Talk to the beneficiary - If you want to make changes which could break a restrictive covenant, try contacting the beneficiary so you can come to a compromise. For example, you could offer to pay to have the covenant removed. Alternatively, you can hire a local estate agent to estimate what impact your proposed changes would actually have on the beneficiary’s property. If you can show that they would not lose anything by allowing the changes to take place, they may be willing to let you go ahead. If not, having this report will be useful for applying to the Upper Tribunal.

If you cannot reach a common ground and you are determined to go ahead with your plans, you can apply to the Upper Tribunal to have the covenant modified or discharged

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What will the Upper Tribunal consider?

If you have no options left, you can always try to challenge your restrictive covenant. However, it will be important to weigh up the costs of doing so with the benefits of the work that you want done on your property. Not only can applications to the Upper Tribunal take well over two years, but they can also be quite expensive. You will more than likely be required to cover the cost of the trial, as well as compensation for the beneficiary, even if you only seek a modification to the covenant rather than a full discharge.

The Upper Tribunal will take several things into account when you make an application:

  • Timing - If a beneficiary wants to enforce a covenant based on something which happened decades ago, it may be easier to make an appeal.
  • Obsolete - If you can show that the land/neighbourhood has changed significantly since the covenant was first put in place, the Upper Tribunal may decide that it is obsolete. However, you should not take this for granted; even seemingly obsolete restrictive covenants have still been enforced in the past. It will help if there have been previous breaches which went unchallenged.
  • Unfair - If a restrictive covenant seriously restricts the reasonable use of the property, the Upper Tribunal may decide that it is unfair.
  • Irrelevant - If you can show that the proposed modifications to your own property would not have a negative impact on the beneficiary’s land in terms of value or practical usage, the Upper Tribunal may allow them to take place. Keep in mind that the Upper Tribunal has a great deal of discretion in deciding what constitutes ‘values’ or ‘benefits’.