Fact 12. Restrictive Covenants – what are they and how do they affect ownership?

Restrictive covenants are legal clauses in property deeds limiting how owners can use their land, affecting building, business, or alterations to preserve value or neighborhood character. They are checked by conveyancers before property purchase to avoid surprises.

By all means focus on price, location, and size—but there’s another crucial aspect that can directly limit what you can do with your land: restrictive covenants. These are legal obligations contained within property title deeds that restrict certain uses or actions. They often go unnoticed until a buyer’s conveyancer identifies them during the title investigation phase.

Understanding restrictive covenants is essential, as breaching one—even unintentionally—can result in legal action or financial penalties. Conveyancers play a vital role in identifying and explaining these restrictions before contracts are exchanged, ensuring that buyers enter into ownership fully aware of any limitations.

What is a restrictive covenant?

A restrictive covenant is a promise contained within a property’s title that limits how the land or property can be used. Usually, it is agreed upon when land is sold and remains legally binding on future owners. Although it might sound simple, these covenants can last for decades—or even centuries—and they can still be enforceable long after the original parties have moved on.

For example, when a large estate is divided into smaller plots, the original owner may impose restrictive covenants to preserve the character of the area or to protect their remaining land from activities they consider undesirable.

Common examples include:

• Not building additional houses or structures without consent

• Prohibiting businesses or trade from operating on the land

• Restrictions on building materials or external appearance to maintain aesthetic consistency

• Limits on putting up fences or walls above a certain height

• Rules against keeping livestock or using the land for certain agricultural purposes

Even where a covenant seems minor, it can have serious implications if your future plans include developing or altering the property.

Types of restrictive covenants

Restrictive covenants can differ greatly depending on the era and the property type. Broadly, however, they fall into two main categories:

1. Covenants related to building and development

These control what can be built on a particular plot. A typical example might forbid the construction of any additional dwelling, extensions beyond a certain size, or conversion of outbuildings into living accommodation without prior consent. Older residential areas often contain these covenants to ensure a uniform look and to prevent overcrowding.

2. Covenants related to behaviour and land use

These focus on what the land or buildings can be used for once built. For example, a covenant might forbid using the property for commercial purposes, running a noisy or noxious activity, or even hanging washing on a front garden line. Some older ones reference trades no longer common—like blacksmithing or dyeing—yet they remain legally binding if not discharged or proven obsolete.

How restrictive covenants are created

Restrictive covenants arise when one landowner sells part of their land but wants to control what happens on it afterwards. The covenant is detailed within the transfer deed or conveyance, clearly stating what is forbidden or limited. Once properly created, it becomes a contractual obligation that “runs with the land”—meaning the restriction passes automatically to future owners.

Importantly, it binds only if two conditions are met:

• The covenant benefits identifiable land retained by the person imposing it.

• It is properly recorded against the property’s title so subsequent purchasers are on notice.

Modern practice requires all covenants affecting land in England and Wales to be registered with HM Land Registry, either in the Property Register or as a note in the Charges Register. When a conveyancer reviews the title for a buyer, they check these registers carefully for active covenants.

How conveyancers identify and explain them

During the conveyancing process, searches and title checks reveal any restrictive covenants that affect the property. The conveyancer reviews the wording, determines its enforceability, and explains the implications clearly to the buyer.

Key conveyancer tasks include:

• Reviewing the title deeds and Land Registry entries

• Identifying who may have the benefit of the covenant (for example, neighbouring landowners)

• Checking whether the covenant is still valid or may have become obsolete

• Advising if indemnity insurance is required to protect against possible breach claims

• Assessing whether planned alterations or uses would breach the covenant

Sometimes the covenant’s language is archaic or open to interpretation. A skilled conveyancer can translate this into modern terms, highlighting practical examples—such as whether a buyer could build an extension, run a business from home, or park a caravan on site.

How restrictive covenants affect homeowners and developers

Restrictive covenants can influence everyday ownership and long-term value. For homeowners, they may block desired improvements or extensions. For developers, they can derail plans entirely until lifted or modified.

Common situations impacted by covenants:

• A homeowner wanting to build a rear extension finds a covenant forbidding additional structures without consent of a historic estate owner.

• A developer buying land for flats discovers a 1950s covenant limiting the site to single-family dwellings only.

• A buyer planning to keep animals learns that livestock or kennels are specifically prohibited.

Even seemingly outdated covenants may still be enforceable. The law does not automatically cancel them based on age, though courts and tribunals can discharge them under certain circumstances.

Can restrictive covenants be removed or modified?

Yes. There are two main routes to remove or alter a restrictive covenant:

1. By agreement

If the person (or successor) who benefits from the covenant can be identified, they may agree to release it, typically in exchange for payment. The variation or release must be completed by a formal Deed and recorded with the Land Registry.

2. By tribunal application

If consent cannot be obtained or the covenant holder cannot be located, an application can be made to the Upper Tribunal (Lands Chamber) under section 84 of the Law of Property Act 1925. The Tribunal may discharge or modify the covenant if one of the following applies:

• It is obsolete due to changes in the character of the area or the use of the land.

• It impedes reasonable use or development.

• Those entitled to the benefit agree, or would not be adversely affected.

However, these applications require detailed legal preparation and evidence, so most property owners explore negotiation and indemnity insurance first.

Indemnity insurance and breach risks

For practical and cost reasons, many conveyancers recommend indemnity insurance to protect buyers against the risk of enforcement if a covenant might have been breached, or if the wording creates uncertainty. The policy does not remove the covenant but covers financial loss and legal defence costs if a claim arises.

Common triggers for indemnity cover include:

• Building works carried out without consent contrary to a covenant

• Missing historical consents or permissions

• Difficulty identifying who benefits from an old covenant

While insurance offers reassurance, it is not a licence to ignore restrictions. Any deliberate breach after policy completion could invalidate the cover.

Why restrictive covenants still matter today

Restrictive covenants reflect changing societal priorities. Many date to an era when estates sought to maintain orderly, quiet neighborhoods or control unsightly trades. Yet modern property owners can find themselves constrained by those same rules.

They remain relevant because:

• They ensure neighbourhood consistency and protect property value.

• They prevent overdevelopment of limited land areas.

• They safeguard original design intentions in planned communities.

However, they can also become outdated barriers to necessary development—especially in regeneration zones or where housing density needs modernisation. Updated legislation may one day reform how such covenants are automatically discharged when redundant, but for now they remain fully enforceable without formal removal or variation.

What happens if a covenant is breached

Breach of a restrictive covenant occurs when an owner uses or alters the property contrary to the covenant’s wording. The consequences can include:

• An injunction requiring the breach to stop (for example, halting building works or removing a structure)

• Damages to compensate the party with benefit of the covenant

• Costs and potential loss of property value

Because of these risks, conveyancers always check for past breaches and future compliance before completion. If a breach is identified after purchase, negotiation or insurance can sometimes mitigate risk, but proactive review remains far safer.

Historic examples and modern interpretation

Historic covenants often contain wording shaped by social contexts long gone. Some Victorian-era landowners forbade “nuisance trades” or building of public houses or slaughterhouses. These seem archaic today, but courts have upheld them when still relevant to benefiting land.

More modern covenants might involve environmental or design-related restrictions:

• Prohibiting removal of established hedgerows

• Dictating roof materials or boundary hedges in new housing developments

• Preventing subdivision of large plots in conservation areas

Courts interpret covenants based on their drafting at the time they were made. Unless ambiguity exists, judges avoid rewriting or implying different meanings. Therefore, careful reading of the precise wording is essential for accurate legal advice.

Practical tips for property buyers

If you’re purchasing a property, consider these steps to avoid covenant pitfalls:

• Ask your conveyancer early whether any restrictive covenants appear on the title.

• Review how they may affect your lifestyle or improvement plans.

• Seek clarification on enforceability—some covenants may benefit land that no longer exists.

• Be cautious with properties previously extended or altered without clear consent.

• If necessary, discuss indemnity insurance options or possible covenant releases.

Understanding before exchanging contracts avoids later conflict, expense, or disappointment.

Role of the conveyancer in protecting you

Conveyancers act as the first line of defence against unexpected title restrictions. Their due diligence ensures buyers are fully informed and protected before committing financially.

Their responsibilities include:

• Obtaining and reviewing official copies of title from HM Land Registry.

• Identifying all current restrictive covenants and any historical ones still registered.

• Explaining each covenant in plain language and assessing impact.

• Advising on whether indemnity insurance or further investigation is appropriate.

• Liaising with the seller’s solicitors for documentation of past consents (if required).

A conveyancer’s expertise can save clients from later disputes and safeguard smooth property ownership.