How to Handle Restrictive Covenants in Property Conveyancing

In property law, restrictive covenants are legal conditions attached to land or property that limit how owners can use it. These covenants are common in both residential and commercial property conveyancing in England and Wales and can have significant consequences for buyers, sellers, and developers. Unlike planning rules imposed by local authorities, restrictive covenants are private legal obligations that “run with the land” and bind current and future owners. Understanding how to identify, interpret and deal with these covenants is essential for anyone involved in buying, selling, or developing property.

This guide explains what restrictive covenants are, how they affect property transactions, the practical steps to address them during conveyancing, and options if you want to challenge or remove them.

What Are Restrictive Covenants?

A restrictive covenant is a binding legal promise usually written into the property's title deeds or other conveyancing documents that limits how the land can be used. These restrictions are made between landowners and, when validly created, continue to bind subsequent owners.

Common Examples

Examples of restrictive covenants may include:

• A prohibition on building additional structures or extensions without consent.
• Restrictions on running a business from the property.
• Limitations on external appearance, such as materials or colour.
• Bans on certain activities, such as keeping livestock or caravans on the land.

These covenants can be imposed by original developers, landowners, or neighbouring propertyholders to protect land value, aesthetics or ground use.

How Restrictive Covenants Affect Conveyancing

Identification During Title Review

During the conveyancing process, a solicitor or licensed conveyancer will review the title deeds and the registered title with HM Land Registry. Restrictive covenants may appear in:

• Section C of the Title Register and the Charges Register for registered land.
• Older conveyancing documentation attached to the register that contains full covenant details.

Identifying covenants early is critical because they may affect:

• Whether a lender will agree to lend on the property.
• Whether your intended use of the land is permitted under the covenant terms.
• How you advise your client (buyer or seller) on the risks and possible restrictions before exchange and completion.

Practical Steps in Handling Restrictive Covenants

1. Understand the Wording and Scope

Carefully review the covenant's wording. Some are narrowly drawn, while others are broad and may seem restrictive in modern use (e.g., not to build anything taller than a single storey). A solicitor should interpret the covenant in the context of the property and convey it clearly to the client.

2. Determine Who Can Enforce the Covenant

Only a party who has the benefit of the covenant-often a neighbouring landowner or original developer-can enforce it. If the original beneficiary no longer owns land in the area or the purpose of the covenant has ceased to apply, enforceability may be uncertain.

3. Check for Mortgage and Sale Implications

Lenders may require covenant consent or indemnity insurance before advancing a mortgage. Indemnity policies protect against future enforcement claims by the beneficiaries.
A seller must disclose any known covenants to potential buyers and may be expected to obtain releases or agreements if the covenant affects property value or use.

4. Consider Indemnity Insurance

Where a restrictive covenant may pose a risk but is unlikely to be enforced, indemnity insurance can be recommended. This insurance covers costs arising from future enforcement or claims and can also reassure future buyers.

5. Seek Professional Legal Advice

Interpreting and dealing with covenants can involve complex legal questions-including whether a covenant remains enforceable. Solicitors or conveyancers with property law experience should be involved, especially if development or significant alterations are planned.

Challenging, Modifying or Removing Restrictive Covenants

Negotiation with the Beneficiary

One practical route is to approach the person or entity that benefits from the covenant and seek their agreement to discharge or modify it. This may involve a payment and formal deed to record the release.

Application to the Upper Tribunal (Lands Chamber)

If negotiation is not possible or the beneficiary does not agree, a landowner may apply to the Upper Tribunal (Lands Chamber) to discharge or modify the covenant under section 84 of the Law of Property Act 1925.

The tribunal may grant a modification or discharge if:

• The covenant is obsolete or no longer serves a practical benefit.
• It impedes reasonable use of the land.
• The benefit to the enforcing party is negligible, and compensation can address any disadvantage.

The Upper Tribunal's procedures (Forms T379, T380, T381 etc.) and requirements for notice and possible objections are detailed in official guidance.

Consequences of Breaching a Restrictive Covenant

If an owner breaches a covenant:

• The beneficiary may apply to court for an injunction to stop or undo the breach.
• They may seek damages for loss caused by the breach.

Planning permission does not override a restrictive covenant, so developments compliant with planning rules may still violate a covenant.

Common Conveyancing Considerations

Impact on Property Value and Saleability

Restrictive covenants can affect how attractive a property is to future buyers, especially if they limit development or use. Clear advice on these risks is a key part of the conveyancing process.

Historical and Unregistered Covenants

Older, unregistered covenants may require inspection of physical deeds or historical documents to understand current obligations and enforceability.

Indemnity Insurance Limits

Indemnity insurance may not be available if the beneficiary has been alerted to an existing or potential breach, reinforcing the importance of early title review.

Common Questions from our Readers

Can a covenant expire?
Some covenants may include expiry dates, and very old covenants can become obsolete. A tribunal can determine whether they remain enforceable.

Does planning permission affect a covenant?
No. Planning consent from a local authority does not remove or override a restrictive covenant.

Who enforces restrictive covenants?
Only parties who have the benefit of the covenant-usually identified landowners with land that benefits from the restriction-can enforce it.

Key Takeaways

Restrictive covenants are powerful legal tools that can significantly affect how property is used and conveyed. In conveyancing:

• Always check the title for covenants early.
• Interpret the scope and enforceability with professional help.
• Consider lender requirements and indemnity insurance where relevant.
• If necessary, negotiate releases or apply to the Upper Tribunal for discharge or modification.

Understanding and managing restrictive covenants helps protect conveyancing transactions, supports informed decision‑making and avoids costly disputes or enforcement actions.