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If you are an avid reader of the news then you may have come across a story recently which highlighted the plight of a retired couple from Hampshire, who face being sued by their neighbours following their decision to turn their home into an upmarket B & B.

The justification for the neighbours’ action lies in a restrictive covenant, said to have been imposed on the couple’s property at the time it was built, and which appears to prevent them from using their home as anything other than a private dwelling.

The couple are dismayed and believe their neighbours are just trying to be difficult, as they object to having a B & B on what is clearly an affluent road in a very exclusive area.

What the outcome of the case will be remains to be seen, but as our resident property expert Anees Khan explains:

“If it turns out that the neighbours’ are right, and the couple have been running their B & B in breach of a restrictive covenant, then there is every chance that their business will have to be closed down, and not only that, the couple could also find themselves having to pay their neighbours compensation and also settle their legal bill.”

This has understandably got B & B owners up and down the country concerned, but as Anees goes on to say:

“The potential problems caused by restrictive covenants are something that we all need to be aware of and that should always be considered when a property is being bought or sold or indeed where there are plans for a renovation. There are too many home owners in the UK who are blissfully unaware that when most properties are built, they are sold subject to conditions which can heavily control what future occupiers can and cannot do and which must legally be observed unless and until they are lawfully removed.”

Why are restrictive covenants imposed?

Restrictive covenants are typically imposed to preserve the character of a local area or to protect the interests of nearby landowners who may see the value or useability of their own properties adversely affected where certain things are allowed to occur, or who may suffer an unacceptable interference with the enjoyment of their property.

What type of restrictions may apply?

Commonly imposed restrictions include:

• a ban on parking commercial vehicles or caravans on a property’s driveway;
• a ban on developing all or any part of a property’s garden to create a new dwelling;
• a prohibition on the use of a property to conduct any sort of trade or business;
• a prohibition on doing anything at a property which causes nuisance or annoyance;
• a bar on carrying out building works without prior approval from the original developer;
• a bar on the installation of external ariels or satellite dishes; and
• a limit on the number of animals or pets that a property can be used to house.

How can I tell if a property I own, or plan to buy, is subject to such restrictions?

The existence of restrictive covenants should be picked up by your conveyancer at the time a property is bought and can also be readily ascertained by you, if you can get hold of a copy of the property’s title deeds.  Doing this should be easy where the property has been registered at the UK Land Registry – you usually just need to submit a request and pay a fee – but it can be more difficult where registration has not taken place and where the title deeds may be held by a third party, such as your bank or building society.

How might a restrictive covenant impact on what I can do?

Depending on the nature of a restrictive covenant, and the exact wording that is used, you may find yourself unable to do a range of things, like:

• offer your house out to rent, either on a long let or as a holiday home through Airbnb;
• install satellite broadband, which may be problematic if you live in an area with poor internet reception;
• use your home to provide paid-for childcare services;
• operate a dog kennel business or a cattery;
• making changes to the appearance of your property or create an extension; or
• raise money by selling off part of your garden so that it can be used as a building plot.

This is the case even where you have obtained planning permission and building regulation consent from your local authority.

What might happen if the terms of a restrictive covenant are breached?

Where the requirements of a restrictive covenant are not observed, you might be asked to pay out compensation, to cease a particular activity or to undo the wrong that has occurred e.g. by taking down a conservatory built without the prior consent of the original developer. In some cases you may even be required to do all three.

Where restrictive covenants exist which appear to have been breached at some point in the past, it may be advisable for you to obtain restrictive covenant indemnity insurance to guard against the risk of enforcement action being taken at some point in the future.

Where you are buying a property, and it is clear that the seller has acted in breach of a restrictive covenant, then it is usual for the cost of an indemnity policy to be met by them.

Is it possible to get a restrictive covenant removed?

Where a restrictive covenant exists, it may be possible for you to get it removed if you can prove that it is obsolete or if you can convince the person entitled to enforce the covenant (i.e. the person for whose benefit it exists) to release you from your obligations.

To get an obsolete covenant removed, you can apply to the Upper Tribunal (Lands Chamber) for an appropriate order.  The Tribunal also has the power to remove or modify restrictions that are not obsolete, but which are instead considered unreasonable or undesirable or which can no longer realistically be enforced, e.g. because the person with the benefit of the covenant no longer exists, as is often the case where the beneficiary is a company which has long since been dissolved.

To get the beneficiary of a covenant to consent to its release you may have to agree to do something in return, like pay a set amount of money.  Whatever the trade off is, it is important that where a deal is negotiated it is formally recorded in a Deed of Release.

How we can help?

At Step Legal Solicitors, we have extensive experience in advising clients on the existence, meaning, effect and enforceability of restrictive covenants affecting land.

This includes advice to:

• first time buyers looking to acquire a new build home which may be subject to various developer imposed restrictions;
• existing home owners looking to carry out renovations but who are concerned about the impact of existing restrictions by which they are already bound;
• buyers of auction property who want to be sure that they know what they are letting themselves in for before committing to bid;
• novice and seasoned buy to let investors who may be on the lookout for an additional property and who are keen to ensure there is nothing in the title deeds which may thwart their rental plans; and
• buyers of shared ownership properties who are keen to understand the level of control they may be subject to by a co-owning housing association.

To find out more, please call us on 0800 1956412 and ask to speak to the head of our residential property department, Anees Khan or to conveyancing lawyer Hannah Killer.