Steps to Remove Restrictive Covenant on Your Property

Introduction to Restrictive Covenants

A restrictive covenant is a legally binding agreement that limits how a property can be used. They are are typically attached to freehold land and are recorded in the title deeds. These covenants are typically written into property deeds and can affect how an owner develops or alters their property. For instance, a covenant may prevent a property from being used for business purposes or restrict certain types of activities, developments, or land uses, such as the type of extensions that can be built.

Although restrictive covenants are designed to protect neighbouring properties or preserve the character of an area, they can sometimes become outdated or unnecessarily restrictive. Under certain circumstances, they can be changed or removed entirely. Owners often seek legal advice to understand their rights and the available options. In England and Wales, the Upper Tribunal (Lands Chamber) plays an important role in determining whether a covenant should be discharged or altered.

Understanding Common Restrictive Covenants

Restrictive covenants come in various forms. Some of the most common include:

• Restrictions on building works, such as preventing additional structures or extensions.
• Limitations on business activity, where the property can only be used for residential purposes.
• Conditions on appearance, including rules about exterior alterations, materials, or fencing.

Unlike restrictive covenants, which limit what can be done on the land, positive covenants require landowners to take certain actions, such as maintaining fences or shared driveways. Positive covenants are generally not binding on successors in title, whereas restrictive covenants can continue to affect land use after ownership changes.

If a property owner breaches a restrictive covenant, the benefiting party, typically another landowner, may take legal action. Restrictive covenants are usually imposed by one landowner for the benefit of another, and these agreements can continue to bind future landowners. The Land Registry holds details of restrictive covenants, and property owners can request a copy of their title deeds to identify any such restrictions.

Landowners should seek legal advice early to understand their rights and responsibilities regarding restrictive covenants and avoid potential disputes.

Modifying Restrictive Covenants

Restrictive covenants can be modified or removed in several ways. The most common situations include when a covenant no longer provides a practical benefit or has become irrelevant due to changes in the area. If the surrounding area has changed significantly, the covenant may be considered no longer relevant and potentially subject to modification or removal.

Homeowners have three main options:

1. Apply to the Upper Tribunal (Lands Chamber) – This is a formal legal process where the tribunal may decide to modify or discharge the covenant. Through this process, a covenant can be legally removed if certain conditions are met.
2. Negotiate with the benefiting party – If the person or organisation benefiting from the covenant agrees, the covenant can be varied by mutual consent. In some cases, parties may be found to have impliedly agreed to a modification or removal based on their conduct.
3. Consider indemnity insurance – This type of insurance offers financial protection in case of future legal claims or costs related to the removal of a covenant.

The Role of the Lands Chamber

The Lands Chamber of the Upper Tribunal (commonly referred to as the lands tribunal) has the authority to remove or modify restrictive covenants under Section 84 of the Law of Property Act 1925. The lands tribunal handles tribunal applications to remove restrictive covenants, especially when parties cannot reach agreement. When reviewing applications, the tribunal considers several factors, including:

• Whether the covenant provides any practical benefit to the benefiting party.
• Whether the party objecting has a legitimate interest in maintaining the restriction.
• The impact of removing or altering the covenant on the public interest, including whether the covenant is still necessary to enforce.

Applicants must provide legal arguments, supporting documents, and evidence to demonstrate why the covenant should no longer apply. The process to remove restrictive covenants through a tribunal application can be complex and may take several months to complete.

Key Considerations

Before pursuing any action to modify or remove a restrictive covenant, property owners should think carefully about:

• Legal advice – A solicitor experienced in property law can assess the strength of the case.
• Costs and potential benefits – The process can involve legal fees, tribunal costs, and possibly compensation payments.
• Development plans – If the covenant limits future development potential, removing it could increase property value.
• Enforcement risks – Understanding who holds the benefit of the covenant is essential before taking any steps.

Indemnity Insurance

Indemnity insurance is a valuable safeguard for homeowners dealing with restrictive covenants. It covers potential legal costs and compensation if a benefiting party objects to works carried out in breach of a covenant.

There are specific policies designed for restrictive covenant insurance, which can help manage the financial risk of disputes. The cost of cover varies depending on factors such as the property’s location, the covenant’s nature, and the planned works. Solicitors often recommend arranging insurance before making a formal application to modify or remove the covenant.

The Benefiting Party

The benefiting party is the person, company, or organisation that gains from the covenant’s restrictions. This might include a neighbouring homeowner, a landowner, or a housing developer who wishes to preserve the area’s character.

Restrictive covenants usually continue to bind new owners of the property, even after a sale or transfer, unless they are legally removed or modified.

In many cases, property owners may be able to negotiate with the benefiting party directly. If they agree to remove or amend the covenant, a formal deed of release can be drawn up. However, if negotiations fail, the benefiting party may still be entitled to compensation if the covenant is modified through the Lands Chamber. If the benefiting party no longer exists, such as in the case of a dissolved company or deceased individual, the covenant may be unenforceable or subject to discharge.

Alternatives to Removing a Restrictive Covenant

When faced with restrictive covenants affecting their property, owners are not always limited to the option of complete removal. In many cases, exploring alternatives can offer a more practical and cost-effective solution, while still respecting the original intent behind the restriction. One of the most common alternatives is to have the restrictive covenant modified rather than discharged entirely. This can be achieved through negotiation with the benefiting party or by making an application to the Upper Tribunal (Lands Chamber) under the Law of Property Act 1925.

Modifying restrictive covenants allows property owners to adapt the terms to better suit their current needs without disregarding the concerns of nearby residents or the benefiting party. For example, if a covenant restricts building works to a certain height, it may be possible to have the covenant modified to permit a slightly taller extension, provided it does not negatively impact the surrounding area. This approach can unlock development potential while maintaining reasonable use of the land.

Another practical alternative is to obtain restrictive covenant insurance, also known as indemnity insurance. This type of policy protects property owners against the risk of legal action or compensation claims if a covenant is breached, especially in situations where the benefiting party cannot be identified or is no longer traceable. Restrictive covenant insurance can be particularly valuable when the restriction is unlikely to be enforced but still appears on the property’s title deeds, offering peace of mind for both current and future owners.

In certain circumstances, property owners may be able to argue that a restrictive covenant is no longer enforceable. Changes in the local area, shifts in public policy, or developments in equality laws can mean that a covenant no longer serves a practical benefit or is contrary to modern standards. For instance, a restriction that once protected against potential nuisances may have become obsolete due to significant changes in land use or the character of the neighbourhood. In such cases, legal arguments can be made to the Upper Tribunal Lands Chamber that the covenant should be modified or discharged, as it no longer provides a real benefit to the benefiting party.

It is essential to seek legal advice before deciding on the best course of action. A property law specialist can assess the specific circumstances, advise on the likelihood of success, and help weigh the legal costs against the potential benefits. Sometimes, the costs of pursuing modification or removal through the tribunal may outweigh the advantages, making alternatives like negotiation or indemnity insurance more attractive.

Common examples of restrictive covenants that may be suitable for modification include those limiting land use to residential purposes, restricting commercial developments, or imposing conditions on building works. Each case requires careful consideration of the legal arguments, the interests of the benefiting party, and the impact on future owners. By exploring all available alternatives and understanding the legal framework, property owners can often find a balanced solution that meets their needs while respecting the continued existence of reasonable restrictions.

Ultimately, the decision to modify, insure against, or seek to have a restrictive covenant removed should be based on a thorough understanding of the law, the specific details of the covenant, and the practical realities of the property. With the right legal advice and a clear strategy, property owners can navigate restrictive covenants efficiently and make informed decisions about the future use and development of their land.

Application Process

Applying to remove or modify a restrictive covenant involves several stages:

1. Preparing documentation – Including copies of title deeds, maps, and evidence supporting why the covenant should be altered.
2. Submitting an application to the Upper Tribunal (Lands Chamber) – Outlining the grounds for modification or discharge.
3. Responding to objections – The benefiting party may contest the application.
4. Hearing and decision – The tribunal will review the evidence and deliver a decision.

This process can be time-consuming and often requires professional legal input. Costs vary depending on the complexity of the case, the need for expert evidence, and whether objections are raised.

Legal Advice

Professional legal advice is essential throughout the process. A solicitor can explain your options, handle the paperwork, and represent your interests before the tribunal if required. They can also advise on whether to pursue negotiation, seek indemnity insurance, or apply for modification through the tribunal.

While legal advice involves additional costs, it often saves time and reduces the risk of expensive disputes later. Property owners should evaluate their circumstances carefully and make decisions based on a full understanding of their legal position.

Sell Your Property Quickly, Even with Restrictive Covenants

Restrictive covenants can make selling or redeveloping a property more complicated, but they do not have to delay your plans. Whether you are dealing with outdated restrictions or waiting on legal approval to modify a covenant, Speed Property Buyers can help you sell your property swiftly and securely.

As one of the UK’s leading property buyers, we purchase homes in any condition and can complete sales in as little as seven days. You will not need to worry about legal delays, chain breaks, or time-consuming negotiations – we handle the process efficiently and offer a guaranteed cash sale.

If you are ready to move on and want to sell your property without the stress contact us today!