Covenants – What Land Owners Should be Aware of
In this article, the Agriculture and Commercial Property teams at Thompson Smith and Puxon (TSP) discuss covenants and what land owners should be aware of. Many properties will have restrictive covenants on their title covering various matters ranging from what the property may or may not be used for such as not selling alcohol, for example, to how many properties can be built on a plot of land.
Although common, covenants are often regarded as outdated and unnecessary and some land owners believe that they are no longer of relevance. But, however old a covenant is they can still be enforced by parties with the benefit of them, which sometimes can be the next door neighbour but often isn’t.
In a recent case, neighbours, trying to prevent the development of an adjoining reservoir, objected to an application to discharge or modify restrictive covenants on land which had been imposed in 1910. The tribunal considering the matter held that the neighbours had no right to object as the benefit of the covenant did not belong to them and that the actual land which was stated to have the benefit of the covenant, when it is was first imposed, could not be ascertained and was not clearly defined.
If a restrictive covenant was created before 1st January 1926 it would be binding on the land owner if they have notice of it. This normally means that it would be evidenced in the title but there are other ways a land owner can be made aware of a covenant. If a restrictive covenant was created on or after 1st January 1926 then the person with the benefit of the covenant should have registered it at the Land Charges Registry so that any future purchaser of a property would be able to see the details and know that the covenant affected the land they were buying. Restrictive covenants registered at the Land Charges Registry relate to unregistered land. Once the land is registered for the first time any covenants should be noted on the registered title.
In many cases the existence of a covenant will not trouble a land owner but there are occasions where the land owner may want to change the use of their property. If a land owner is proposing changes to a property, whether for their own use or to obtain planning permission with a view to selling a property, covenants, and whether they are being breached, should always be considered at an early stage. Always review the title before making a planning application and be aware that even some works that don’t require a planning application, such as an extension or permitted development, can breach a covenant.
Finding out whether a covenant exists and can be enforced are the first steps a land owner should take. They then need to consider how to deal with the covenant. It could be ignored, in the hope that nobody raises an issue, although it could still become a problem on a subsequent sale. Making an application to vary or modify as in the reservoir case is an option, as is finding the party with the benefit of the covenant, if they can be traced, and getting them to formally release the covenant, usually for monetary compensation.
In practical terms if the land owner wants to obtain planning permission and then sell the land, taking out a restrictive covenant indemnity policy (insurance) is the most practical way forward but this can usually only be obtained once you have got planning permission.