In 2020, the Supreme Court ruled against a housing developer who erected affordable housing on land which was subject to a Restrictive Covenant.
The Restrictive Covenant was in favour of neighbouring land used as a hospice and stated that the land on which the developer built houses could only be used as a car park. The court reached this decision despite what it admitted to be the public’s interest in the affordable housing being built.
Restrictive Covenants are promises given by an owner of land to not do certain things with their land. Some Restrictive Covenants are interesting historical anomalies – we have recently come across a covenant not to sell any dairy products or beer from a property, and not to make glue from a residential property. However, Restrictive Covenants – if they are enforceable – can seriously restrict what a property owner can do with their land, and affect its value. Restrictive Covenants can prevent certain businesses being run from a Property, can prevent land being used other than as a private dwelling (which could prevent land being used for commercial purposes, or even for a holiday let in some circumstances), and not altering or building on a property, in some instances without obtaining the prior consent of a neighbouring land owner.
Restrictive Covenants can be historic, but continue to bind later owners of a property – even if that later owner was not a party to the original agreement creating the Restrictive Covenant. However, it is usually only possible for someone to enforce a Restrictive Covenant against an owner of a property if:
- It is genuinely restrictive in nature – if it is a Positive Covenant, requiring a property owner to do something or spend money, it may be that it is not enforceable against the current owner of the property;
- It has been properly registered at the Land Registry;
- It truly benefits the land belonging to the person looking to enforce it – it improves the value or amenity of their land and is not merely of personal benefit to them;
- The meaning of the Restrictive Covenant is clear; and
- The person looking to enforce the Restrictive Covenant owns the land which was originally intended to be benefitted by it – in the event of land being broken up and sold off, this ‘benefitting land’ can be difficult to identify.
The enforceability of Restrictive Covenants is a complex area of law, and our Commercial Property and Litigation teams can provide expert advice to anyone looking to enforce a covenant, or anyone against whom a covenant is being enforced. We have also assisted our clients with agreements to remove and vary Restrictive Covenants on their properties, and with applications to the Land Registry where the terms of a Restrictive Covenant can no longer be complied with (for example where a company with the benefit of a covenant no longer exists). We also provide practical help to our clients buying and selling land affected by Restrictive Covenants.