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What's New? > News & Press Releases > Advice on dealing with covenants

30

Aug 12

Advice on dealing with covenants

By: Carolyn Hughes

Carolyn Hughes

Many properties are subject to restrictive covenants.

A restrictive covenant is a private agreement between landowners that may restrict the way land may be used and developed in the future. It is a type of contractual arrangement that we come across in conveyancing transactions.

Here at Ward Gethin Archer, we can advise you as to the nature and suitability of any such covenant that you may encounter when entering into a property-related agreement. In most cases, the nature of the covenant is consistent with the type of property being sold.

A covenant in the title deeds of the property is, basically, a promise to do or not do something on or to the property, and is restrictive in nature. They are often imposed by a landowner selling off land but who wishes to retain some control over what happens with the land once it has been sold.

It may have an expiry date or it may state that some of the covenants are not to expire and, consequently, you should be aware of the effect it may have on your use of the property and on your conveyancing transaction.

Examples of restrictive covenants found in title deeds are:

  1. Not to cause a nuisance to your neighbours.
  2. Not to carry out any building or residential development.
  3. Not to use the land for any trade or business activity.
  4. Not to erect any buildings or other structures without the written consent of the developer (this does not mean that you do not need to obtain the usual planning permission. building regulation consent from the Local Authority).

In such cases, provided that they will not seriously impede the buyer’s intended use of the property, no further action may be taken by the solicitors acting for the buyer other than informing their clients of the extent of the covenants and telling them that they have a liability for observing the restrictive covenants during their period of ownership.

However, this does often get overlooked and restrictions get breached without the clients even remembering until they come to sell!

Instructions may reveal that the buyer’s intended use of the property after completion will cause a breach of the restrictions. Unless it is clear that the covenants are invalid, it is safest to assume that they are enforceable and consider whether it is possible to take out an indemnity insurance policy that will cover liability for the future breach of covenant.

For more information about this topic or for assistance with a property transaction, contact Carolyn Hughes, pictured above, on 01353 662203 or via www.wardgethinarcher.

This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek our specific advice.